Spandana Sphoorthy Financial reports weak Q1 results; analysts weigh in

Most brokerages have maintained their rating on the stock; however, they have cut the target price; check out target here

Spandana Sphoorty Financial, shares rose 0.93 per cent in trade on Monday, August 18, 2025, logging an intra-day high of ₹242.55 per share on BSE.  The stock saw buying after the company reported its Q1 results on Thursday, August 14, 2025, after market hours.  Most brokerages have maintained their rating on the stock; however, they have cut the target price owing to a decline in asset under management (AUM) in FY26 and credit costs to remain elevated in Q2FY26, with AUM growth likely to remain subdued in FY26.

Spandana Sphoorty Financial Q1 results recap

The small-cap microfinance company posted a consolidated net loss of ₹360.21 crore in Q1FY26, as compared to a net profit of ₹55.71 crore a year ago. 

 

 

Its revenue from operations also declined 57 per cent to ₹300.46 crore, as against ₹706.97 crore a year ago.    READ STOCK MARKET UPDATES TODAY LIVE

Spandana Sphoorty Financial Q1 results analysis: Brokerages view 

Nuvama Institutional Equities | Hold | Target cut to 260 from ₹300

The brokerage believes Spandana’s performance is weaker than peers, which appear to be turning around faster. The company incurred a net loss driven by a sharp decline in AUM/disbursals, elevated stress loans, and pressure on NIM from reversals and slower growth.

 

“Forward flows into stress buckets remain high. Management explained that as the X bucket CE continues to improve, forward flows shall ease and the company would return to profitability in H2FY26E. X bucket CE improved from 96.9 per cent in Apr-25 to 98.5 per cent in Jul-25,” the report read.

Motilal Oswal | Buy | Target cut to ₹825

Analysts reckon that the company’s AUM is likely to decline 20 per cent in FY26 and expect profitability only in FY27. Credit costs are expected to remain elevated in Q2FY26, with AUM growth likely to remain subdued in FY26. 

 

“Spandana Sphoorty reported a weak Q1FY26, with a sharp decline in disbursements and AUM, as the focus shifted to strengthening collections and operational stability. Credit costs were elevated due to forward flows from Stage 2 assets and are likely to remain high in Q2FY26 as well, and we expect near-normalisation only by the end of FY26,” the report read.

 

It added: Spandana Sphoorty will continue to exhibit asset quality stress for the next couple of quarters.