Spandana Sphoorty soars 19% in weak market on high volume; up 42% in 2 days

Spandana Sphoorty share price: Around 13.7 million shares have changed hands on the counter, cumulatively, on the BSE and NSE, thus far. This is roughly five-times the stock's two-week average volume

Spandana Sphoorty Financial share price soared 18.5 per cent on the BSE in Wednesday’s intraday trade. Spandana Sphoorty shares hit an intraday high of Rs 477.35 per share at a time when the Sensex today was trading in red.

 

At 2:50 PM, Spandana Sphoorty stock was ruling 17.2 per cent higher at Rs 472 per share as against a 0.09 per cent dip in the benchmark Sensex index. Till the time of writing this report, 13.72 million shares had changed hands on the counter, cumulatively, on the BSE and NSE.

 

This is roughly five-times the stock’s two-week average volumes.

 

 

With today’s surge, Spandana Sphoorty shares are up 42 per cent in two days. By comparison, the Sensex index has stayed flat during the period.  After the sharp surge in the stock over the past two days, stock exchanges sought clarification from the company on the stock price move.   In response, Spandana Sphoorty said: "This is to clarify that all the material information/announcement that may have bearing on the operations/performance of the Company, which include all the necessary disclosures, have always been disclosed by the company within stipulated time and the same is made available in public domain. The company will make disclosures as per the Listing Regulations whenever it is required to do so".

 

Spandana Sphoorty Financial Limited (SSFL) is a non-banking financial company (NBFC) and microfinance lender in India that focuses on rural areas. The company aims to improve the socio-economic status of low-income households, particularly women, in rural and urban areas.

  Spandana Sphoorty news today

 

On December 27, 2024, CARE Ratings reaffirmed its ratings on various financial instruments of the company, revising outlook on some of them to ‘Negative’ from ‘Stable’.

 

For instance, CARE Ratings reaffirmed its ‘CARE A+’ rating on the NBFC’s Long Term Bank Facilities worth Rs 1,500 crore. The outlook, however, was revised to ‘Negative’ from ‘Stable’.

 

Similarly, CARE Ratings reaffirmed its ‘CARE A+’ rating on Spandana Sphoorty’s Non-Convertible Debentures worth Rs 500 crore and Rs 200 crore. The outlook was revised to ‘Negative’ from ‘Stable’ here as well.

 

Besides, CARE Ratings reaffirmed its ‘CARE A1+’ rating on Spandana’s Commercial Papers worth Rs 100 crore.

 

The reaffirmation of the rating of the commercial paper (CP), non-convertible debentures (NCD) and bank term loans of Spandana Sphoorty Financial Limited (SSFL) is based on the company’s healthy liquidity profile, comfortable capitalisation position with low gearing levels as compared to peers, diversified resource profile with increasing share of bank borrowings, and geographically diversified AUM as on September 30, 2024, the rating agency said.

 

“However, we have revised our outlook on the long-term bank facilities and NCD of SSFL to ‘Negative’ from ‘Stable’ owing to weakening of profitability and asset quality metrics in H1FY25 and expectation of further rise in delinquencies and consequent uptick in the credit costs and overall weak profitability of the company in near term,” CARE Ratings said in its rationale.

 

The microfinance industry is undergoing significant stress, primarily due to increasing borrower indebtedness. SSFL is also dealing with significant attrition and operational difficulties amidst its plan to shift to a weekly collection model. However, the company has decelerated this transition in light of the challenges faced within the sector. Further, the company has stopped acquiring new-to-credit customers and also stopped new customer acquisition in 46 per cent of the branches amidst stress in the MFI sector.

 

“Going forward, CARE Ratings anticipates a moderation in loan book growth considering the ongoing MFI stress. Additionally, with rising credit costs expected to exert further pressure on profitability, the company's ability to maintain its financial flexibility in the current environment will remain key rating monitorable,” the agency said.

 

Spandana Sphoorty Q3 results preview

According to analysts at Motilal Oswal Financial Services, Spandana Sphoorty may post a net loss of Rs 456.7 crore, higher than the net loss of Rs 216.3 crore seen during Q2FY25 and a profit of Rs 127.4 crore logged in Q3FY24.

 

It estimates disbursements to be around Rs 1,500 crore, leading to AUM of Rs 9,600 crore. Annualised credit costs, it said, may increase to 34.9 per cent vs 20.7 per cent seen in Q2FY25.

 

Margin is likely to contract ~70bp Q-o-Q to 13.3 per cent, Guidance on credit costs, margins, and AUM growth to be closely monitored, MOFSL added.