Spandana Sphoorty spurts after Q2 results

Shares of Spandana Sphoorty Financial were trading 6.8% higher at Rs 1,167 after the company announced a decent Q2 result after market hours yesterday.

Microfinance institution Spandana Sphoorty reported a drop in net profit on the back of rising deferred tax expense.

Net profit fell 42.2% to Rs 42.50 crore on a 40.1% rise in total income to Rs 360.54 crore in Q2 September 2019 as against Q2 September 2018.

The company's Deferred Tax Expense rose 262% to Rs 144.81 crore in Q2 September 2019 shrinking company's net profit drastically. Deferred tax impact on company's P&L during Q2 2019 was notionally high since the actual tax outflow in Q2 2018 was only Rs 39.94 crore.

The company's Asset Under Management rose 37% on YoY basis and stood at Rs 5407 crore. The micro finance company also reported an increase in capital adequacy ratio. The capital adequacy ratio in September 2019 stood at 50%.

Net interest income for September 2019 rose 57% to Rs 243 crore YoY basis. The microfinance institution also added 125 new branches in a year's span. The microfinance institution has a maximum presence in Orissa and Madhya Pradesh with 149 branches each.

Spandana Sphoorty is a fourth largest non-banking financial company - micro finance institution (NBFC-MFI) and the sixth largest amongst NBFC-MFIs and SFBs (small finance banks) in India in terms of AUM with a geographically diversified presence in India. It offers income generation loans under the joint liability group model, predominantly to women from low-income households in rural Areas.

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