Spandana Sphoorty Q4 Review - Cost-Efficient Business Model To The Rescue: ICICI Securities
A customer holds Indian rupee notes at a store in the Dadar wholesale flower market in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)  

Spandana Sphoorty Q4 Review - Cost-Efficient Business Model To The Rescue: 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 Q4 FY21 performance was characterised by prudent approach in recognising stress (written off ~Rs 3.6 billion in FY21) and strengthening balance sheet as reflected in its total provision of ~Rs 4.1 billion (~6% of on-balance sheet loans).

Collections (excluding arrears) fell to 92% in April 2021 and 82% in May 2021 from 96% in March 2021.

While lower collections in near-term due to Covid-19 second wave pose risk to asset quality (expect credit loss of ~2-3% in FY22), we believe, the company’s cost-efficient business model will help it gain industry-leading profitability.

Click on the attachment to read the full report:

ICICI Securities Spandana Q4FY21 Results Update.pdf

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