Spandana Sphoorty Q1 - Prudent Provisioning; Strategic Focus On Building Secured Assets: ICICI Securities
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ICICI Securities Report
Spandana Sphoorty Financial Ltd.’s Q1 FY22 performance was characterised by prudent approach in recognising stress and strengthening balance sheet by building adequate provision buffer.
It built additional provision of ~Rs 1.5 billion towards stressed asset pool of Rs 7.65 billion (customer missing one full or partial EMI during Q1 FY22) and would continue to build further ~Rs 1.4 billion-1.5 billion provisioning pool over next three quarters.
Currently, Spandana Sphoorty holds cumulative provision buffer of Rs 5.7 billion, or ~7.8% of assets under management.
Further prioritising collections over growth helped it improve collections sharply to 93% by July 2021 from lows of 72% in May 2021.
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