Fundamental Analysis

SPANDANA SPHOORTY FINANCIAL LTD.

{Ticker : 542759 { BUY: Rs. 1100 { Target: Rs. 1240 

Spandana Sphoorty Financial Limited (SSFL) is engaged in the business of micro finance. The company provides small ticket unsecured loans to women of low-income households in rural and urban areas for one to two years. It also provides business loans, income generation loans and loans against gold jewellery. For Q3FY20, the company reported 22 per cent rise in the total income to Rs 358 crore, from Rs 293 crore in Q3FY19. The Net Interest Income (NII) increased by 43 per cent to be Rs 233 crore in Q3FY20, as compared to Rs 163 crore in Q3FY19. The company gained a net profit of Rs 130 crore in Q3FY20, clocking a growth of 40 per cent from the net profit of Rs 93 crore gained in Q3FY19. Growth in micro-financing opportunities in India is a growth driver for the company. Hence, we recommend a BUY.