Review

SPANDANA SPHOORTY FINANCIAL

Ticker : 542759
FV : Rs 10
52-Week H/L : Rs 1400/403.50

We had previously recommended Spandana Sphoorty Financial in volume 36, issue no. 18 (dated February 24, 2020), when the stock was trading at Rs 1,100. Spandana Sphoorty Financial Limited (SSFL) is engaged in the business of microfinance. On a consolidated quarterly front, the net interest income (NII) increased 56 per cent to Rs 263 crore in Q4FY20 from Rs 168 crore in Q4FY19. The net interest margin (NIM) increased by 71 bps to 16.6 per cent in Q4FY20. The company reported a net profit of Rs 83.03 crore in Q4FY20, up by 12.71 per cent from Rs 73.67 crore in Q4FY19. The pandemic has led to a higher portfolio write‐off than demonetisation. The current scenario is far worse for the company as there is a complete suspension of operations and prolonged difficulties are being experienced for reaching out to customers. Owing to these uncertainties, we recommended our investor readers to EXIT the scrip on August 18, 2020.