 "Spandana Sphoorty Financial reports Rs 440 crore loss in Q3 FY25")
Micro-finance institution Spandana Sphoorty Financial (SSFL) posted a huge loss of Rs 440 crore in the third quarter ended December 2024 (Q3FY25) as it provided Rs 666 crore for stressed loans. The lender had posted a net profit of Rs 127 crore in the third quarter of FY24.
Its net interest income (NII) declined by 14 per cent on a year-on-year (Y-o-Y) basis to Rs 265 crore in Q3FY25, down from Rs 309 crore in Q3FY24, according to a press statement filed with BSE. Spandana Spoorthy's stock closed 4.5 per cent lower at Rs 341.7 per share on BSE, ahead of the results which were announced after markets closed on Thursday.
With a networth of Rs 3,082 crore and capital adequacy of 35.7 per cent at the end of Q3FY25, the lender is well capitalised to navigate the current times. The Board has authorised SSFL to raise upto Rs 750 cr of confidence capital for future business requirements, at an appropriate time, the lender said.
Shalabh Saxena, chief executive and managing director, SSFL said, like the second quarter (Q2FY25), Q3FY25 was challenging as more borrowers turned delinquent and the company deliberately slowed down disbursement to drive portfolio quality and center meeting discipline.
Disbursements declined by 43 per cent Y-o-Y to Rs 1,443 crore in Q3FY25 from Rs 2,542 crore in Q3FY24. The assets under management shrunk by 14 per cent YoY to Rs 8,936 crore in Q3FY25 from Rs 10,404 crore in the year-ago quarter.
Reflecting stress on its loan book, the gross non-performing assets (GNPAs) rose to 4.85 per cent of total advances from 1.61 per cent in the year-ago quarter, while net NPAs increased to 0.98 per cent in Q3FY25 from 0.48 per cent in the corresponding period of last year.
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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 (joint liability group) 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, Saxena said.
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