Spandana Sphoorty Records 32% YoY Growth in AUM: Q1 FY2025 Results

Spandana Sphoorty Financial Limited announced its financial results for the quarter ended June 30, 2024 (Q1 FY25), reflecting a mix of strong growth and asset quality challenges.

Operational Highlights

• Asset Under Management (AUM): Demonstrated robust growth, increasing by 32% year-on-year (YoY) to ₹11,723 crore.
• Disbursements and Customer Acquisition: The company added approximately 2 lakh new customers, although this represents a 23% YoY decline due to factors such as the heatwave and general elections. Disbursements for the quarter surged by 37% YoY to ₹2,283 crore.
• Asset Quality: The company experienced temporary disruptions impacting asset quality. Gross Non-Performing Assets (GNPA) rose to 2.60% from 1.50% in the previous quarter, while Net Non-Performing Assets (NNPA) increased to 0.53% from 0.30%.
• Collection Efficiency: Gross collection efficiency declined to 97.5% from 99.3% in the previous quarter, while net collection efficiency fell to 94.0% from 96.5%.
• Borrowings: The company optimised its borrowing mix, with banks now accounting for 59% of total borrowings. ₹1,554 crore was mobilised during the quarter.

Financial Performance

• Total Income: Grew by 40% YoY to ₹737 crore.
• Net Interest Income (NII): Increased by 47% quarter-on-quarter (QoQ) to ₹425 crore.
• Yield: Improved by 35 basis points YoY to 24.4%.
• Cost of Borrowings: Decreased by 92 basis points YoY to 11.6%.
• Pre-Provision Operating Profit (PPOP): Surged by 52% YoY to ₹287 crore.
• Profit After Tax (PAT): This was impacted by higher credit costs due to increased delinquencies, falling to ₹56 crore from ₹119 crore in Q1 FY24.

Mr. Shalabh Saxena, CEO and Managing Director, while announcing the results, stated, “Q1FY25 was a challenging quarter for the company. The long-drawn 7 phase of general elections, a severe heat wave across the country and higher attrition in select geographies posed a challenge to the quality of the portfolio. Despite these temporary disruptions, our teams were able to add about 2 lac new borrowers during the quarter, taking our total customer base to 34.1 Lacs (+42% YoY). “

He added, “Disbursement for the quarter was up by 37% YoY to ₹2,283 Crore. Income was up 40% YoY to ₹737 Crore, and NII increased by 47% YoY to ₹425 Crore. The challenges faced during the quarter reflected in elevated delinquencies and higher credit costs, resulting in PAT declining to ₹56 Crore from ₹119 Crore reported for Q1FY24. GNPA at the end of the quarter was at 2.60%, and NNPA was at 0.53%. We expect the business to be normalised by the second half of the year. With the constant support of all our stakeholders and the efforts of our employees, we are reasonably confident of sustaining our growth momentum while improving the efficiencies of existing operations during the course of the year.”

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