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ICICI Securities Report
Spandana Sphoorty Financial Ltd.'s Q1 FY23 financial performance was marred by management's decision to write-off pre-Covid related stress to the tune of Rs 7 billion.
However, credit quality and book performance (post write-offs) appear to be in a much better shape – participating 31-90 @3.5% and collection in restructured book stood at 80% as on June 2022.
Overall collections (excluding arrears), including gross non-performing loan and restructured book, stood at 94% during Q1 FY23. GNPL fell to 6.7% in Q1 FY23 from 15% in Q4 FY22.
Spandana Sphoorty' standard restructured book stands at Rs 2.4 billion or 4% of assets under management. Against total stress pool of ~12% of AUM, it carries total provision of 5% of AUM.
New management, in Q1 FY23, continued to focus on aligning and refining processes to pave the way for achieving Vision 2025 goals and maintaining credit quality in retained portfolio of Rs 55 billion going forward.
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