Spandana Sphoorty’s Accelerated Provision Marred Q3 Earnings: ICICI Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Spandana Sphoorty Financial Ltd.’s Q3 FY21 performance was characterised by aggressive write-offs to the tune of approximately Rs 2 billion (more than 120-days past due) and clear focus on pursuing growth but in calibrated manner, as reflected in 14% year-to-date-FY21 growth in assets under management.

Further, a provision buffer of ~Rs 3.6 billion (~5% of AUM) against a non-paying customer pool of ~2.2% and proforma net non-performing loan at 1% would cushion earnings in coming quarters.

Collection efficiency (ex-arrears) improved steadily to ~93% in Q3 FY21 from ~89% in Q2 FY21.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.