Spandana Sphoorty Financial reported a meaningful turnaround in Q4 FY26, returning to profitability for the first time in six quarters and recording the first AUM growth in eight quarters. The company's management discussed these results during an earnings conference call held on May 05, 2026, covering financial performance, portfolio quality, operational metrics, and strategic priorities for the year ahead.

Financial Performance: Return to Profitability

The quarter marked a significant inflection point for Spandana Sphoorty Financial, with the company posting a PAT of INR5 crores against a loss of INR95 crores in Q3 FY26. PBT came in at INR8 crores compared to a loss of INR125 crores in the previous quarter. Pre-Provision Operating Profit (PPOP) strengthened to INR39 crores for Q4, up from INR8 crores reported for Q3 FY26. The following table summarises key financial metrics for the quarter:

Yield for the quarter improved to 22.8% from 22.4% in Q3, driven by a favourable shift in portfolio mix towards newly originated loans. The disbursement yield stood at approximately 25.25%, with current loan pricing ranging between 23% and 26% depending on customer vintage. NIM contracted to 9.9% from 11.1%, largely reflecting the impact of cost of borrowings seen in the prior quarter. Opex declined to INR161 crores from INR195 crores in Q3 FY26, reflecting ongoing cost optimisation efforts. Management indicated that the blended cost of borrowings for FY27 is expected to remain below 12.5%.

Portfolio Quality and Collection Efficiency

Portfolio quality showed broad-based improvement across key metrics during the quarter. X-bucket collection efficiency rose to 99.7% for March 2026, up from 99.3% for December 2025, with a similar trend observed across the five major states of Bihar, Karnataka, Andhra Pradesh, Madhya Pradesh, and Odisha. The AUM in the 1 to 90 DPD bucket declined to 1.3% from 2.5% in the previous quarter.

Management noted that 80% of the AUM is now constituted under the new guardrails and Business Rule Engine (BRE), with eight months of seasoning underpinning the 99.7% collection efficiency. The company also collected nearly INR65 crores last quarter from its pool of 90-plus customers, marking the second consecutive quarter of collections upwards of INR65 crores from this segment. Management highlighted that 98% of disbursements were made to customers who were regular, with Spandana applying a stricter 30-day delinquency threshold compared to the industry-wide 60-day norm. Rejections continue to be in the range of 60% to 65%.

Disbursements, Borrowings, and Customer Base

Monthly disbursements averaged approximately INR500 crores during Q4 FY26, compared to INR400 crores per month in Q3 and INR300 crores per month in Q2. The share of new customers in Q4 stood at approximately 45%, comprising both new-to-credit and new-to-Spandana borrowers, with new-to-credit accounting for approximately 10% and new-to-Spandana approximately 35%. The overall customer base stood at a little over 11.5 lakhs, with approximately 1.2 lakh new borrowers added during the quarter, compared to approximately 63,000 in Q3 FY26. Management targets adding another 7 lakh new borrowers during FY27, which would take the total borrower base closer to 1.6 million. Average ticket size continues to be approximately INR60,000, with the range expected to hover between INR60,000 and INR80,000–INR85,000 as the portfolio matures.

On the borrowings side, the company raised INR1,272 crores during the quarter. Total borrowings since the rights issue stood at INR3,116 crores. The lender overlap — defined as Spandana plus three lenders — stood at approximately 4.8%, with 34% being only Spandana customers, 37% being Spandana plus one, and 25% being Spandana plus two.

Subsidiary Performance: Criss Financial

Within the group company and subsidiary, the micro-LAP portfolio stood at approximately INR322 crores, while the individual loan portfolio at Criss Financial stood at approximately INR260 crores. GNPA at Criss Financial improved to 6.50% from 11.45% in the previous quarter, supported by an ARC transaction and improving collection efficiencies. The micro-LAP GNPA remained stable at approximately 1.2%.

Management indicated plans to launch a revised individual loan product — targeting customers with enterprises and working capital requirements — with ticket sizes ranging between INR1 lakh and INR4 lakhs, fully unsecured, and with 100% e-NACH repayments. The product will be offered at interest rates between 23% and 26%, with an average loan tenure of approximately 24 months. A pilot is planned for select states and branches within Spandana before being extended to Criss Financial.

Strategic Priorities and Operational Outlook

Management outlined several strategic priorities for the period ahead:

• LOS Platform Migration: Migration to a new Loan Origination System (LOS) developed by Perfios is underway, with the individual loan product expected to go live either before the end of the current quarter or early next quarter, and JLG migration anticipated around October–November.
• Customer Satisfaction: The customer satisfaction score improved to 71% in Q4 from approximately 22% in Q3, with a target of 95% set for the near term.
• Digital Repayments: Digital repayment currently averages approximately 22% of collections; management is actively working to increase this proportion, including discussions with SROs to target an industry-wide level of approximately 50%.
• CFL Merger: The merger process has commenced and is expected to take another five to six months.
• AI and Technology: Initiatives under exploration include MIS automation, AI-assisted call centre operations for customer satisfaction, and data science for customer segmentation and sourcing decisions. Bot calling is currently being used for 90-plus customers to support collections.

Management targets an AUM of approximately INR6,500 crores by the end of FY27, progressing towards INR9,000–INR10,000 crores by FY28. Monthly disbursements are expected to be maintained at approximately INR500 crores for the near term before scaling to INR550–INR600 crores. The company targets a minimum X-bucket collection efficiency of 99.5% irrespective of book size, with medium-term opex-to-AUM guidance of 7%–8%. The company has 1,250 branches and management noted that the existing infrastructure is adequate to support an AUM of up to INR12,500 crores without significant additions to fixed costs.

Spandana Sphoorty Financial has notified the stock exchanges of a forthcoming meeting with analysts and institutional investors, scheduled for Thursday, May 14, 2026. The intimation was filed pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and was communicated to both BSE Limited and the National Stock Exchange of India Limited on May 11, 2026.

Meeting Details

The interaction is part of the Nuvama Management Connect Series and will be held in a virtual, group format. The key details of the scheduled meeting are outlined below:

Disclosure and Compliance

The company has clarified that all discussions during the interaction will be based on publicly available information. Spandana Sphoorty Financial has explicitly stated that no unpublished price sensitive information (UPSI) is intended to be discussed during the meeting. The company also noted that the schedule may undergo changes due to exigencies on the part of the participants or the company itself.

The intimation was signed by Vinay Prakash Tripathi, Company Secretary of Spandana Sphoorty Financial, and the information is also being made available on the company's official website.