Spandana Sphoort

Spandana Sphoorty Financial Limited achieved a significant financial turnaround in Q4 FY26, reporting a Profit After Tax (PAT) of INR5 crores, a stark improvement from a loss of INR95 crores in Q3 FY26. The Profit Before Tax (PBT) also turned positive at INR8 crores, compared to a loss of INR125 crores in the previous quarter. This positive shift was supported by a strengthening Pre-Provision Operating Profit (PPOP), which rose to INR39 crores from INR8 crores in Q3 FY26, and a reduction in operating expenses (OPEX) to INR161 crores from INR195 crores.

The company demonstrated strong growth in its Assets Under Management (AUM), which increased by 12% quarter-on-quarter to INR4,400 crores. This growth was underpinned by monthly disbursements of approximately INR500 crores. Asset quality showed marked improvement, with Gross Non-Performing Assets (GNPA) reducing to 3.8% from 4.2% in December, and Net Non-Performing Assets (NNPA) falling to 0.73% from 0.92%. The X-bucket collection efficiency remained robust at 99.7%, with 80% of the AUM now constituted under new guardrails.

Spandana added 1.2 lakh new borrowers in Q4 FY26, significantly higher than 63,000 in Q3 FY26, with new customers comprising 45% of total additions. The company maintains a stringent underwriting policy, not disbursing to customers with 30+ days past due (DPD), exceeding the industry norm of 60 days. Management aims to add another 7 lakh new borrowers in FY27, targeting a total customer base of 1.6 million, while ensuring 50-55% of customers are new to the portfolio.

The company is actively migrating to a new Loan Origination System (LOS) platform developed by Perfios, which is expected to enhance flexibility and agility. This year's primary focus for AI initiatives is on MIS automation and improving the customer satisfaction (CSAT) score, which rose from 22% in Q3 to 71% in Q4, with a target of 95% by early FY27. Management also aims to reduce the Opex to AUM ratio to 7-8% in the medium term, noting that current infrastructure can support up to INR12,500 crores of AUM without significant fixed cost additions.

Spandana is preparing to launch a new individual loan product in June or July, which will be unsecured and target customers with existing enterprises and higher income levels (potentially above INR3 lakhs). This product will involve personal visits, PAN collection, and 100% e-NACH repayments, with initial ticket sizes ranging from INR1 lakh to INR4 lakhs. The existing micro-LAP portfolio stands at approximately INR260 crores, and the GNPA for the Criss Financial portfolio (which includes individual loans) improved significantly to 6.50% from 11.45% last quarter, partly due to an ARC transaction.

The company maintained strong capital adequacy with a CAR of 35.9% and a net worth of INR2,130 crores as of March 31, 2026. Liquidity stood at INR1,438 crores. The marginal cost of borrowings reduced by 120 basis points to 12% last quarter, though the blended cost is expected to remain around 12.5% for FY27. Management projects AUM to reach INR6,500 crores by FY27 and INR9,000-10,000 crores by FY28, while maintaining X-bucket collection efficiency at 99.5% and acceptable credit costs of 2.5-3%.