Spandana Sphoorty posts ₹12 cr Q1FY27 profit as ICRA outlook turns stable
Spandana Sphoorty Financial Limited posted a Q1FY27 net profit of ₹12 crore, supported by an 11% quarter-on-quarter AUM growth to ₹4,887 crore and improved asset quality. ICRA upgraded the outlook to Stable, reflecting stronger collection efficiencies and reduced GNPA.
*this image is generated using AI for illustrative purposes only.
Spandana Sphoorty Financial Limited reported a consolidated net profit after tax (PAT) of ₹12 crore for the quarter ended June 30, 2026 (Q1FY27), a significant turnaround from the ₹360 crore loss in the same period last year. The improvement was driven by an 11% quarter-on-quarter growth in assets under management (AUM) to ₹4,887 crore and strong disbursement momentum of ₹1,371 crore. Concurrently, ICRA Ratings changed the company’s outlook to Stable from Negative, reflecting improved portfolio quality with gross non-performing assets (GNPA) declining to 3.64%.
The Board of Directors approved the unaudited financial results on July 23, 2026, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Vinay Prakash Tripathi, Company Secretary, submitted the investor presentation detailing the quarterly performance. Management highlighted that the company is on a growth trajectory with all key indicators reflecting improvement following a challenging phase for the microfinance sector.
Financial Performance Highlights
Total income rose 9% quarter-on-quarter to ₹303 crore in Q1FY27, compared to ₹277 crore in Q4FY26. Net interest income surged 39% to ₹135 crore, aided by a yield improvement of 182 basis points to 24.6%. Pre-provision operating profit (PPOP), excluding recoveries, stood at ₹16 crore, while PPOP including recoveries remained stable at ₹40 crore. The marginal cost of borrowing decreased to 11.3% from 12.0% in Q4FY26.
| Particulars | Q1FY27 (₹ cr) | Q4FY26 (₹ cr) | Change |
|---|---|---|---|
| Total Income | 303 | 277 | +9% |
| Net Interest Income | 135 | 97 | +39% |
| Pre-Provision Operating Profit (incl. recovery) | 40 | 39 | Stable |
| Net Profit After Tax | 12 | 5 | +140% |
| Yield (%) | 24.6 | 22.8 | +182 bps |
| Marginal Cost of Borrowing (%) | 11.3 | 12.0 | -70 bps |
Disbursements totaled ₹1,371 crore, with approximately 61% extended to new customers. This compares to ₹1,539 crore in Q4FY26 and ₹280 crore in Q1FY26. Liquidity stood at ₹1,316 crore at the end of June 2026.
Asset Quality and Operational Metrics
Asset quality showed further improvement, with consolidated GNPA falling by 15 basis points to 3.64%. Net NPA decreased to 0.68% from 0.73%. Standalone GNPA was reported at 2.91%, down from 3.33% previously. The provision coverage ratio (PCR) was maintained at approximately 81%.
Collection efficiency metrics strengthened across the board:
- Gross collection efficiency improved to 96.6% from 95.3%.
- Net collection efficiency rose to 95.9% from 94.7%.
- X-bucket collection efficiency reached 99.5% for June 2026.
The company engaged with customers having more than 90 days past due (DPD), resulting in recoveries of ₹51 crore during the quarter. Total recoveries from this pool over the past 18 months amounted to ₹325 crore.
Balance Sheet Strength and Rating Update
Spandana Sphoorty reported a net worth of ₹2,140 crore. The capital to risk-weighted assets ratio (CRAR) stood at 33.8%, compared to 35.9% at the end of March 2026. The company borrowed ₹1,597 crore during Q1FY27, an increase from ₹1,272 crore in Q4FY26, supporting its liquidity position.
ICRA Ratings revised the outlook to Stable from Negative, maintaining the BBB+ rating. Other agencies including CRISIL and CARE also maintain BBB+ ratings with stable outlooks, while India Ratings maintains a BBB+ rating with a negative outlook.
What the Numbers Show
The sharp rise in net interest income, outpacing total income growth, indicates effective asset-liability management through higher yields and lower funding costs. The simultaneous improvement in collection efficiency and reduction in GNPA suggests that management’s focus on portfolio quality is yielding tangible results. With over 60% of disbursements going to new customers, the company is actively expanding its borrower base while maintaining strict credit discipline, positioning it for sustainable growth in the recovering microfinance sector.
Historical Stock Returns for Spandana Sphoorty Financial
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +2.44% | -3.80% | +11.08% | +20.71% | +1.02% | -53.12% |
How will the divergence in outlooks between ICRA/CRISIL/CARE (Stable) and India Ratings (Negative) impact Spandana Sphoorty's cost of capital and investor sentiment in the near term?
Given that 61% of disbursements were to new customers, what specific risk mitigation strategies is management employing to ensure these new borrowers maintain the improved collection efficiency seen in the existing portfolio?
With the marginal cost of borrowing decreasing to 11.3%, how sustainable is this funding advantage given the current macroeconomic interest rate environment and competitive landscape for microfinance lenders?
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