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
Finance company Spandana Sphoorty Financial announced Q2FY25 results AUM: Rs 10,537 crore 8% YoY growth (Rs 9,784 crore: Q2FY24). Disbursement– Our focus during the quarter was on serving the existing borrowers. Disbursement for the quarter was Rs 1,514 crore vs. Rs 2,512 crore in Q2FY24, decline of 40%. H1FY25 disbursement at Rs 3,798 crore was 9% lower YoY. Asset Quality temporary disruptions had an impact on asset quality. GNPA: 4.86% (30-Jun-24: 2.60%). NNPA: 0.99% (30-Jun-24: 0.53%). PCR: Provision Coverage Ratio has been maintained at 79.66%. Collection Efficiency: Gross Collection Efficiency was at 93.7% for Q2FY25 (97.5% in Q1FY25). Net collection efficiency was 90.8% (94.0% in Q1FY25). Borrowings: We continue to optimize our borrowing mix in view of business requirements. Banks now account for 54% of total borrowings. Rs 1,584 crore was mobilized during Q2FY25: down 50% compared to Q2FY24 and flat vs. Q1FY25. Financial Performance: Total Income: Rs 707 crore in Q2FY25 - growth of 10% YoY. Net Interest Income: Rs 341 crore in Q2FY25, YoY growth of 9%. Yield: 22.4% decline of 202 bps YoY. Cost of borrowings: 11.8% in Q2FY25 decrease of 77 bps YoY. Pre-Provision Operating Profit (PPOP): Rs 228 crore for Q2FY25 - decline of 12% YoY. Higher credit cost due to an increase in delinquencies resulted in reported loss of Rs 216 crore for the quarter vs. Rs 125 crore PAT reported in in Q2FY24 and Rs 56 crore PAT reported in Q1FY25. Shalabh Saxena, CEO and Managing Director, said: “Microfinance sector has been facing multiple headwinds over the last two quarters. The operations that were initially impacted by long drawn elections and intense heat wave during summers of 2024 were further disrupted by heavy rainfall and floods in certain states during the months of July to September 2024. A number of other issues like higher-thannormal attrition levels, localized drives like Karza Mukti Abhiyan and increasing leverage of borrowers all had an impact on the sector. Keeping all these factors in view, Spandana was cautious and very selective in its lending during the quarter. The focus during the quarter was on improving portfolio quality and serving existing customers. Hence, while the Income for the quarter was up 10% YoY to Rs 707 crore and NII was up 9% YoY to Rs 341 crore, the elevated delinquencies had a bearing on the impairment costs resulting in a reported loss of Rs 216 crore. GNPA at the end of the quarter was 4.86% while NNPA was 0.99%. The management team has taken up various measures to address the challenges including increasing bench strength, strengthening branch level controls, introducing technology and people interventions, refining of credit policy and focusing on softer aspects. With improvement in the operating environment and the various initiatives undertaken, we expect the situation to normalize in the coming quarters.” Result PDF