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