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Spandana Sphoorty Financial suffers Rs 216 cr consolidated loss in Q2FY25

Provisions for stressed loans grow multi-fold

Q2 earnings, Q2

Abhijit Lele Mumbai

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Microfinance lender Spandana Sphoorty Financial Ltd (SSPL) suffered a consolidated loss of Rs 216 crore in the second quarter ended September 2024 (Q2FY25) on multi-fold rise in provisions for stressed loans.
 
It had posted a consolidated net profit of Rs 125 crore in during the same period last year.
 
SSPL in a press statement said its net interest income expanded by nine per cent year-on-year (Y-o-Y) to Rs 341 crore in Q2FY25 from Rs 312 crore in Q2FY24. The Net Interest Margins (NIMs) declined sharply to 12.8 per cent in Q2FY25 from 14.1 per cent in Q2FY24, according to an analyst presentation filed with BSE. Its stock closed 1.31 per cent higher at Rs 460.15 per share on BSE.
 
 
The impairment on financial instruments grew almost six fold to Rs 516.41 crore in Q2FY25 from Rs 90.5 crore a year ago, according to the statement of consolidated financial results.
 
Shalabh Saxena, CEO and managing director, said the microfinance sector has been facing multiple headwinds over the last two quarters. The operations were initially impacted by long drawn elections and intense heat waves during summer this year. They were further disrupted by heavy rainfall and floods in certain states during July to September 2024.
 
A number of other issues like higher-than-normal attrition levels, localised drives like Karza Mukti Abhiyan and increasing leverage of borrowers, all had an impact on the sector, Saxena added.
 
The temporary disruptions had an impact on asset quality. The gross non-performing assets (NPAs) rose to 4.86 per cent in September 2024 from 2.6 per cent in June 2024 and 1.4 per cent in September 2023. The Net NPA’s moved up to 0.99 per cent in September 2024 from 0.53 per cent in June 2024 and 0.42 per cent a year ago.
 
The assets under management (AUM) grew by eight per cent Y-o-Y to Rs 10,537 crore in Q2FY25 from Rs 9,784 crore at the end of Q2FY24. As far as disbursement is concerned, the focus was on serving the existing borrowers. The disbursements were down 40 per cent to Rs 1,514 crore in Q2FY25 from Rs 2,512 crore a year ago.
 

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First Published: Oct 28 2024 | 7:38 PM IST

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