Daijiworld Media Network – Hyderabad

Hyderabad, May 31: In a major financial setback, microfinance firm Spandana Sphoorty Financial Ltd has reported a net loss of Rs 434.3 cr for the quarter ending March 31, (Q4 FY25), marking a sharp turnaround from a profit of Rs 128.6 cr during the same period last year.

The company’s revenue from operations declined steeply by 38%, falling to Rs 414.8 cr in Q4 FY25 from Rs 669 cr in Q4 FY24, according to its stock exchange filing. At the operating level, the company swung to a negative EBITDA of Rs 389 cr, in stark contrast to the ?394.6 crore profit posted a year earlier.

Spandana attributed the poor performance to a challenging business environment and a cautious lending strategy, which significantly impacted operations. Its Assets Under Management (AUM) dropped 43% year-on-year to ?6,819 crore, down from ?11,973 crore in March 2024.

Loan disbursements for the full financial year declined sharply by 48%, falling to ?5,605 crore. Meanwhile, asset quality continued to deteriorate, with Gross Non-Performing Assets (GNPA) rising to 5.63% in March 2025 from 4.85% in December 2024. Net NPA also edged up to 1.19% from 0.98%.

Despite the rising stress, Spandana maintained a healthy provision coverage ratio of 80%, indicating adequate provisioning for bad loans. However, collection efficiency remained subdued. Gross collection efficiency dropped marginally to 91.5% in Q4 FY25 from 92.4% in Q3 FY25, while net collection efficiency stayed nearly flat at 90.9%.

Total income for FY25 slipped 3% year-on-year to ?2,424 crore, with net interest income (NII) also falling 5% to ?1,228 crore. The yield on assets contracted by 173 basis points to 22.5%, though the cost of borrowings held steady at around 12%.

The steep decline in earnings and asset quality comes at a time when the microfinance sector continues to grapple with post-pandemic recovery challenges and credit stress in rural pockets.