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Economic Times
5 days ago
- Business
- Economic Times
Spandana Sphoorty posts Rs 360 crore Q1 loss on bad loan impact
Microfinance company Spandana Sphoorty Financial suffered a consolidated net loss of Rs 360 crore in the first quarter of the fiscal, making it the fourth consecutive quarterly loss, on account of high asset quality stress and drop in business volume as well as income. ADVERTISEMENT The lender had earned a consolidated net profit of Rs 56 crore in the year ago period. Thereafter, it reported losses in every quarter. Its consolidated income fell 59% year-on-year at Rs 304 crore against Rs 734 crore. Provisions to cover bad loans were higher at Rs 422 crore as compared with Rs 209 crore. "The losses for the quarter ended June 30, 2025 were mainly due to significantimpairment losses (including technical write offs) arising from credit deterioration of loans to customers," the company said in a stock exchange wrote off loans to the tune of Rs 581 crore in the June quarter, contributing to the elevated credit costs. ADVERTISEMENT "This will be improved going forward by strengthening on-ground recovery. Accordingly, the Company expects to generate sufficient taxable profits to fully utilize the losses," the company said in a joint statement by chairperson Abanti Mitra and interim chief executive officer Ashish Kumar Damani. Unlock 500+ Stock Recos on App The consolidated loss before tax for the June quarter was Rs 481 crore. ADVERTISEMENT Spandana recognized a deferred tax asset of Rs 544 crore to the extent it is considered recoverable, based on probable future taxable income supported by revised approved business plans and budgets. The lender's standalone loan book contracted to Rs 3877 crore at the end of June from Rs 5555 crore three months prior to that. Gross non-performing assets ratio was at 4.88% at the end of June as compared with 4.85% three months back. Net NPA remained at 0.96%. ADVERTISEMENT The company's consolidated assets under management stood lower at Rs 4958 crore, as compared with Rs 11723 crore a year back. The GNPA for the consolidated balance sheet was 5.49% against 2.60% a year back. Spandana was non-compliant with certain covenants related to portfolio at risk, gross NPA, tangible net worth, and quarterly profitability as of and for the quarter ended June 30. It has obtained waivers in respect of such non-compliant covenants from few of the lenders. "The company has been in constant communication with its lenders and is confident that no demand for immediate repayment of borrowed funds will be made due to non-compliance with the covenants," it said. ADVERTISEMENT The company management is of the view that it would be able to realise all its assets and discharge all its liabilities in the normal course of business. "There are no material uncertainties on the company's ability to continue as a going concern," it said. It has a strong capital position, with tier I capital of ₹1,245.53 crores and a capital to risk-weighted assets ratio of 37%. It has successfully raised fresh investment of Rs 200 crore through a partly paid rights issue of shares. The balance Rs 200 crore of the Rs 400-crore rights issue will be realised at a later date.
Time of India
5 days ago
- Business
- Time of India
Spandana Sphoorty posts Rs 360 crore Q1 loss on bad loan impact
Microfinance company Spandana Sphoorty Financial suffered a consolidated net loss of Rs 360 crore in the first quarter of the fiscal, making it the fourth consecutive quarterly loss, on account of high asset quality stress and drop in business volume as well as income. The lender had earned a consolidated net profit of Rs 56 crore in the year ago period. Thereafter, it reported losses in every quarter. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Its consolidated income fell 59% year-on-year at Rs 304 crore against Rs 734 crore. Provisions to cover bad loans were higher at Rs 422 crore as compared with Rs 209 crore. "The losses for the quarter ended June 30, 2025 were mainly due to significant impairment losses (including technical write offs) arising from credit deterioration of loans to customers," the company said in a stock exchange filing. Live Events It wrote off loans to the tune of Rs 581 crore in the June quarter, contributing to the elevated credit costs. "This will be improved going forward by strengthening on-ground recovery. Accordingly, the Company expects to generate sufficient taxable profits to fully utilize the losses," the company said in a joint statement by chairperson Abanti Mitra and interim chief executive officer Ashish Kumar Damani. The consolidated loss before tax for the June quarter was Rs 481 crore. Spandana recognized a deferred tax asset of Rs 544 crore to the extent it is considered recoverable, based on probable future taxable income supported by revised approved business plans and budgets. The lender's standalone loan book contracted to Rs 3877 crore at the end of June from Rs 5555 crore three months prior to that. Gross non-performing assets ratio was at 4.88% at the end of June as compared with 4.85% three months back. Net NPA remained at 0.96%. The company's consolidated assets under management stood lower at Rs 4958 crore, as compared with Rs 11723 crore a year back. The GNPA for the consolidated balance sheet was 5.49% against 2.60% a year back. Spandana was non-compliant with certain covenants related to portfolio at risk, gross NPA, tangible net worth , and quarterly profitability as of and for the quarter ended June 30. It has obtained waivers in respect of such non-compliant covenants from few of the lenders. "The company has been in constant communication with its lenders and is confident that no demand for immediate repayment of borrowed funds will be made due to non-compliance with the covenants," it said. The company management is of the view that it would be able to realise all its assets and discharge all its liabilities in the normal course of business. "There are no material uncertainties on the company's ability to continue as a going concern," it said. It has a strong capital position, with tier I capital of ₹1,245.53 crores and a capital to risk-weighted assets ratio of 37%. It has successfully raised fresh investment of Rs 200 crore through a partly paid rights issue of shares. The balance Rs 200 crore of the Rs 400-crore rights issue will be realised at a later date.
Time of India
30-05-2025
- Business
- Time of India
Spandana Sphoorty suffers net loss, auditors flag concerns over frauds
Kolkata: Spandana Sphoorty Financial on Friday reported a Rs 434 crore of net loss on consolidated basis for the fourth quarter ending March 31, while the independent auditors flagged concerns over possibilities of misstatement due to likely fraud which may involve collusion and override of internal control. This was Spandana group's third quarterly net loss in a row, as the lender is facing intense asset quality stress. Its gross non-performing assets ratio jumped to 5.63% at the end of FY25 as compared with 4.85% three months back and 1.5% a year ago. The company had reported a net profit of Rs 129 crore in the fourth quarter of FY24. "The heightened delinquencies contributed to elevated impairment cost and resulted in a net loss of Rs 434 crore for Q4FY25," interim chief executive Ashish Damani said. The company ended the fiscal with an annual net loss of Rs 1035 crore against Rs 501 crore profit in the preceding fiscal. Live Events "The microfinance industry faced unprecedented challenges due to a combination of external and structural headwinds," the company said in its note to stock exchanges. The note was signed by chairperson Abanti Mitra and Damani. Managing director and chief executive officer Shalabh Saxena resigned from his position on April 23. His sudden resignation raised suspicion that there is something more to it than meets the eye. ET on April 25 reported that Spandana said to be under the Reserve Bank of India's lens for unreported frauds and cash balance mismatches at the branch level. "The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control," independent auditor BSR & Co said Friday, in its report accompanied with the company's quarterly and annual financial statement. "We exercise professional judgment and maintain professional skepticism throughout the audit," the auditor said. Spandana's consolidated assets under management shrank 43% year-on-year to Rs 6819 crore at the end of March from Rs 11973 crore a year back. The group disbursed merely Rs 365 crore during the fourth quarter, less than one-tenth of Rs 3970 crore of disbursement it did in the year-ago period. The group's operational stress was further intensified by increased field-level attrition, contributing to higher delinquencies, gross slippages and elevated credit costs. "These factors, which emerged in Q1 and persisted through the year, significantly impacted field operations, disrupted center meetings, and hindered the timely delivery of services to borrowers including timely collections," the company said.
Economic Times
30-05-2025
- Business
- Economic Times
Spandana Sphoorty suffers net loss, auditors flag concerns over frauds
Kolkata: Spandana Sphoorty Financial on Friday reported a Rs 434 crore of net loss on consolidated basis for the fourth quarter ending March 31, while the independent auditors flagged concerns over possibilities of misstatement due to likely fraud which may involve collusion and override of internal control. ADVERTISEMENT This was Spandana group's third quarterly net loss in a row, as the lender is facing intense asset quality stress. Its gross non-performing assets ratio jumped to 5.63% at the end of FY25 as compared with 4.85% three months back and 1.5% a year ago. The company had reported a net profit of Rs 129 crore in the fourth quarter of FY24. "The heightened delinquencies contributed to elevated impairment cost and resulted in a net loss of Rs 434 crore for Q4FY25," interim chief executive Ashish Damani company ended the fiscal with an annual net loss of Rs 1035 crore against Rs 501 crore profit in the preceding fiscal. "The microfinance industry faced unprecedented challenges due to a combination of external and structural headwinds," the company said in its note to stock exchanges. The note was signed by chairperson Abanti Mitra and Damani. ADVERTISEMENT Managing director and chief executive officer Shalabh Saxena resigned from his position on April 23. His sudden resignation raised suspicion that there is something more to it than meets the on April 25 reported that Spandana said to be under the Reserve Bank of India's lens for unreported frauds and cash balance mismatches at the branch level. ADVERTISEMENT "The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control," independent auditor BSR & Co said Friday, in its report accompanied with the company's quarterly and annual financial statement."We exercise professional judgment and maintain professional skepticism throughout the audit," the auditor said. ADVERTISEMENT Spandana's consolidated assets under management shrank 43% year-on-year to Rs 6819 crore at the end of March from Rs 11973 crore a year back. The group disbursed merely Rs 365 crore during the fourth quarter, less than one-tenth of Rs 3970 crore of disbursement it did in the year-ago group's operational stress was further intensified by increased field-level attrition, contributing to higher delinquencies, gross slippages and elevated credit costs. "These factors, which emerged in Q1 and persisted through the year, significantly impacted field operations, disrupted center meetings, and hindered the timely delivery of services to borrowers including timely collections," the company said. (You can now subscribe to our ETMarkets WhatsApp channel)
