Finance company Spandana Sphoorty Financial announced Q3FY25 results AUM – Rs 8,936 crore 14% YoY decline (Rs 10,404 crore – Q3FY24). Disbursement– During the quarter stringent disbursement criteria was adopted and serving existing customers was prioritized. Rs 1,443 crore was disbursed in Q3FY25 vs. Rs 2,543 crore in Q3FY24 - a decline of 43%. Asset Quality: – industry wide challenges had an impact on asset quality. GNPA – 4.85% (30-Sep-24 – 4.86%). NNPA – 0.98% (30-Sep-24 – 0.99%). PCR – Provision Coverage Ratio has been maintained at ~80% Collection Efficiency: Gross Collection Efficiency was at 92.4% for Q3FY25 (93.7% in Q2FY25). Net collection efficiency was flat QoQ at 90.7% (90.8% in Q2FY25). Borrowings for the quarter were calibrated to meet the company’s disbursement and liquidity requirements. Rs 872 crore was mobilized during Q3FY25 – down 62% compared to Q3FY24 and down 45% compared to Q2FY25. Financial Performance: Total Income: Rs 573 crore in Q3FY25 - 13% YoY decline. Net Interest Income: Rs 265 crore in Q3FY25, lower by 14% YoY. Yield: 21.1% decline of 291 bps YoY. Cost of borrowings: 12.2% in Q3FY25 decrease of 8 bps YoY. Pre-Provision Operating Profit (PPOP): Rs 78 crore for Q3FY25 - decline of 67% YoY. Higher credit cost due to an increase in delinquencies resulted in reported loss of Rs 440 crore for the quarter and loss of Rs 216 crore reported in Q2FY25. Shalabh Saxena, CEO and Managing Director, said:, “The microfinance industry in India has been going through a challenging phase in the current financial year. A wide set of challenges including borrower leverage, dilution of JLG model, poor center meeting attendance and high attrition continue to impact the sector. All these factors together have manifested into challenges on maintaining the collection levels. Being one of the large players, Spandana has not been immune to the challenges. Like Q2FY25, Q3FY25 was challenging as more borrowers turned delinquent and the company deliberately slowed down disbursement to drive portfolio quality and center meeting discipline. The Company provided a total of Rs 666 crore towards impairment costs leading to a Rs 440 crore reported loss for the quarter. A joint action by the industry through the implementation of guardrails will help improve discipline in the industry. With a Net-worth of Rs 3,082 crore at the end of Q3FY25; CRAR of 35.7%; and gearing at a modest 2.2x, the company is well capitalized to navigate the current times. The Board has authorized the Company to raise upto Rs 750 crore of confidence capital for future business requirements, at an appropriate time. Number of initiatives for strengthening controls and processes with the aid of technology are being driven. The management team is taking all steps possible to ensure a return to normalcy in the next few quarters.” Result PDF