Spandana Sphoort Q2 FY27 Earnings Call — Analysis (NSE: SPANDANA)
Spandana Sphoorty delivers steady Q2FY27 recovery with AUM crossing ₹5,000 Cr and guided towards a ₹10,000 Cr AUM target by March 2028.
Result quality: stable — Results context unavailable. Management sentiment: optimistic.
The take
Q2FY27 Consolidated PAT ₹18 Cr ( +50% QoQ ) . Guidance raised — FY29-FY30 micro-lap aum ₹1,000 Cr . New story: Turnaround momentum .
Results
AUM grew 10% QoQ to ₹5,364 Cr, yields expanded to 24.9%, NIM improved to 13.6%, and reported PAT stood at ₹18 Cr (standalone PAT ₹35 Cr) with GNPA falling to 2.5%.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| AUM | ₹5,364 Cr | +10% | qoq · Q2FY27 · vs Q1FY27 |
| Disbursements | ₹1,481 Cr | none · Q2FY27 | |
| Consolidated PAT | ₹18 Cr | +50% | qoq · Q2FY27 · vs ₹12 Cr in Q1FY27 |
| Standalone PAT | ₹35 Cr | +118.75% | qoq · Q2FY27 · vs ₹16 Cr in Q1FY27 |
| PPOP (excluding write-backs) | ₹52 Cr | +225% | qoq · Q2FY27 · vs ₹16 Cr in Q1FY27 |
| PPOP (including write-backs) | ₹79 Cr | +97.5% | qoq · Q2FY27 · vs ₹40 Cr in Q1FY27 |
| Net Interest Margin (NIM) | 13.6% | +110bps | qoq · Q2FY27 · vs 12.5% in Q1FY27 |
| Portfolio Yield | 24.9% | +30bps | qoq · Q2FY27 · vs 24.6% in Q1FY27 |
| Marginal Cost of Borrowing | 10.6% | -260bps | sequential · Q2FY27 · vs 13.2% in Q3FY26 |
| Gross NPA | 2.5% | -110bps | qoq · Q2FY27 · vs 3.6% in Q1FY27 |
| Net NPA | 0.5% | -18bps | qoq · Q2FY27 · vs 0.68% in Q1FY27 |
| X-bucket Collection Efficiency | 99.6% | +0bps | qoq · Q2FY27 |
| 31-90 DPD Delinquency | 0.55% | -18bps | qoq · Q2FY27 · vs 0.73% in Q1FY27 |
| Closing Liquidity | ₹1,379 Cr | point_in_time · Q2FY27 · Sep-26 |
Guidance
Management targets reaching ₹10,000 Cr AUM by March 2028 and achieving BAU ROA of 3.5%-4.0% with ROE of 14%-15%.
What management committed to
- CFL merger regulatory approval will be received within the next 3 to 4 months from October 2026. — Q4FY27
- Micro-LAP AUM will be taken to INR1,000 crores over the next 2 to 3 years. — INR1,000 crores, FY29-FY30
- [Spandana] will need to raise the next leg of capital around the middle of next year if the plan goes as aimed. — Q2FY28
- The company will look at insuring loans through the CGFMU scheme in the coming year. — FY28
- Micro-LAP ticket size will be focused on the INR5 lakh to INR15-20 lakh segment going forward, moving from the previous INR1-5 lakh segment. — INR5 lakh to INR20 lakhs, FY28 onwards
Key themes
Underwriting discipline and balance sheet normalisation
How the narrative shifted
- Turnaround momentum: The narrative moved from calling this a 'new morning' to a sustained performance streak ('a good quarter for the third time in a row'), embedding greater credibility and stability in the turnaround story.
- Calibrated, discipline-led growth: The 'no heroics' verbal marker was replaced by actionable strategies like risk-tiered sourcing restrictions in Maharashtra, but the core discipline principle is consistently applied.
- Recovery windfall from legacy pool: constructive
Operational commentary
- Tightened underwriting in Maharashtra: categorized 127 branches into risk tiers; in 18 critical stress branches, halted new-to-credit onboarding and tightened new-to-Spandana norms.
- Portfolio originated under new guardrails (post April 1, 2025) now constitutes 96% of the microfinance book, with GNPA on this fresh book at just 0.5%.
- Completed second tranche of rights issue raising ₹194 Cr (total equity raised ₹400 Cr across both tranches).
- Piloted new Loan Origination System (LOS) with branch-wide migration planned over the next couple of months.
- Subsidiary Criss Financial Limited (CFL) merger process initiated with regulatory approval expected within 3-4 months.
- Micro-LAP strategy pivot: shifting ticket size focus from ₹1-5 lakh to ₹5-15/20 lakh with 60%-65% LTV and 7-10 year tenure across 6 states.
Analyst Q&A
Q. What is the net credit cost guidance for H2FY27 given early indications of drought and flood in certain states?
Gross credit cost expected around 2.5% to 3.0%; specific net credit cost guidance is premature given evolving ground situation in Maharashtra, though management aims to keep it to the bare minimum via recoveries.
Q. What drove the sharp drop in GNPA this quarter, and was it aided by an ARC sale?
Confirmed that an ARC transaction in subsidiary Criss Financial contributed to the GNPA decline; even excluding that, GNPA ratio showed an underlying sequential improvement, while gross absolute additions were ₹15 Cr.
Q. Will MFI borrowers facing drought conditions in Maharashtra and Karnataka suffer severe income loss leading to defaults?
Clarified that MFI borrowers are not direct farmers but engaged in diversified allied activities and multi-skilled trades; natural calamities have historically not caused permanent credit distortion in microfinance.
Research and educational content only. Not investment advice.