Spandana Sphoorty drops 8% as bad debts surge and disbursements decline

Shares of Spandana Sphoorty Financial fell 8% after the microfinance lender’s asset quality fell sharply in the March quarter.

Disbursements fell 43% year-on-year to Rs 1,385 crore while asset quality declined sequentially. The gross non-performing asset ratio for the March quarter came in at 17.7% from 5.5% in the prior quarter.

Source: company exchange file

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As of 11:08 am IST, shares of the non-bank lender were trading down 3.7% to Rs 415 on BSE.

The company’s consolidated net profit fell sharply by 42% to Rs 28.6 crore in the March quarter on one-time settlement charges and transition expenses. It had posted a consolidated net profit of Rs 49.3 crore in the period a year ago.

However, the collection efficiency of the non-bank lender continues to improve steadily, including in the restructured portfolio which represents only 13% of total assets under management.

Source: company exchange file

“With a clear focus on rural India, we are confident to increase our market share by taking advantage of the significant growth expected in these markets,” the company said.

The company plans to expand the business to assets under management of Rs 15,000 crore, about twice the current figure, over the next three years.

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