The company continues to demonstrate strong disbursement traction, while margins should remain resilient supported by declining funding costs, recent pricing actions, and operating leverage from scale.

Spandana Sphoorty (SPANDANA)’s 2QFY26 loss stood at ~INR2.5b (vs. MOFSLe loss of INR2.4b). NII dipped 70% YoY to ~INR1.05b (in line). Opex declined ~14% YoY to ~INR1.9b (in line).

Gross advances grew 7.8% YoY, driven by strong momentum in small business loans (+21.9% YoY), used vehicle finance (+50.2% YoY), and housing finance (+12.0% YoY). Deposits rose 18.3% YoY, though slower CASA growth (+11.3% YoY) led to a 1.8% YoY...

Equitas SFB (Equitas)’s financial performance continues to be marred by elevated credit cost and a >20% QoQ decline in the high-yielding MFI portfolio.

With stress in the MFI segment receding and companies strategically shifting towards secured, high-yield assets such as affordable housing and vehicle loans, both advances and deposit growth are expected to get back on track by year-end, with advances projected to grow at 19% YoY. While credit costs are anticipated to decline, the shift in portfolio mix is likely to compress NIMs in the short term, leading to a temporary impact on return metrics. However, by the end of FY27, ROA is projected to improve to approximately ~2%. We upgrade our rating to Accumulate on the stock with a revised...

Net Interest Income (NII) for Q1FY26 declined by 1.6% YoY (+7.0% QoQ) to INR 9,370 Mn, in-line with our estimates. The Net Interest Margin (NIM) for Q1FY26 increased by 10bps sequentially to 12.8%, led by decline in cost of borrowings, partially offset marginal decline in portfolio yield.

declined by 10 bps compared to FY24, settling at 12.9%. Operating expenses increased by 11.0% YoY to Rs.1,108 cr. in FY25, while a decline in fee and other income led to a marginal rise in the cost-to-income ratio to 30.7%, up from 30.5% in the previous year. Despite a sharp 327.1% YoY increase in provisions due to accelerated write-offs targeting delinquent accounts, the company reported an annual profit of Rs.531.4 cr. Gross NPA and Net NPA rose sharply to 4.8% and 1.7%, respectively, from 1.2% and 0.4% in FY24, reflecting a notable deterioration across all PAR buckets. While collection efficiency remained subdued for the first three quarters of the year, it showed signs of recovery towards the end of FY25, indicating early momentum in asset quality stabilization....

Fusion Finance (“Fusion”) reported a net loss of ~INR1.65b in 4QFY25 (vs MOFSLe loss of INR1.4b). FY25 loss stood at INR12.2b (vs. PAT of INR5b in FY24).

expected to support earnings recovery. The bank is projected to exit FY26 with a Return on Assets (ROA) of 1% and sustain an ROA above 1% throughout FY27. With stress in the microfinance segment subsiding, we assign an "Accumulate" rating to the stock, with a target price of 68, based on 1.1x FY27E Book Value per Share (BVPS)....

Fusion reported a net loss of ~INR7.2b in 3QFY25 (vs. MOFSLe loss of INR2b), as NIM contracted due to interest income reversals and the reversal of all net Deferred Tax Assets (DTA) to date.

We maintain our HOLD recommendation on the stock.

We revise our rating from BUY to HOLD.

Fusion Microfinance (Fusion) reported a net loss of ~INR3.1b in 2QFY25 (vs. MOFSLe loss of ~INR1.8b) due to significantly high credit costs.

We maintain our HOLD recommendation on the stock.

AU SFB’s Q2FY25 performance was mixed with it sustaining profitability (RoA of 1.6%) and growth momentum (loan growth at 6% QoQ) but credit cost continues to be higher than the guided range.

Though credit cost rose sharply, AU SFB reported a sharp earnings beat led by strong fee income/ treasury gains and lower opex. The bank managed to report RoA/RoE at 1.7%/ 14.5% in Q2FY25.

We revise our recommendation to HOLD from BUY earlier.