Spandana Sphoorty Q2FY22 results: Net loss stands at Rs 58 cr

Spandana Sphoorty Q2FY22 results: Net loss stands at Rs 58 cr

FPJ Web DeskUpdated: Thursday, January 06, 2022, 10:02 AM IST
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Spandana Sphoorty had posted a net profit of Rs 66.76 crore for the corresponding quarter of the previous financial year./ Representational Image | File photo

Microfinance company Spandana Sphoorty Financial Ltd (SSFL) on Wednesday announced its financial results with a delay and posted a consolidated loss of Rs 57.94 crore for the second quarter ended September 2021.

The company had posted a net profit of Rs 66.76 crore for the corresponding quarter of the previous financial year. On a quarter-on-quarter basis, the company had posted a net profit of Rs 53.95 crore in the quarter ended June 2021.

For the half-year ended September 2021, the company has reported a consolidated net loss of nearly Rs 4 crore, as against a profit of Rs 125.69 crore in the year-ago period.

Its total income (consolidated) stood at Rs 396.19 crore in the September 2021 quarter, up from Rs 354.11 crore a year ago. However, it was down from Rs 434.90 crore in the June 2021 quarter.

On November 12, the company had informed about the delay in announcing Q2FY22 financial results because of the top-level management changes after the resignation of the then managing director and founder.

Listed entities are required to submit their quarterly financial results within 45 days from the close of a particular quarter, in this case before November 14, 2021.

The company's erstwhile managing director and founder, Padmaja Gangireddy, had resigned on November 2, 2021, with immediate effect.

Following this, Spandana immediately re-constituted the management committee comprising the longest-serving directors of the company. It also appointed interim CEO and interim CFO.

The change in management after Gangireddy's resignation and other factors such as increase in the portfolio at risk (PAR) and non-performing assets (NPA) ratios due to higher delinquencies caused by the COVID-19 pandemic had resulted in the breach of some of the covenants related to borrowings.

The company has been regularly servicing all its borrowings and has sought forbearance/ waiver from the lenders with respect to non-compliance with the covenants, wherever applicable, it said in a regulatory filing.

''Based on the discussions with the lenders, the company has no reason to believe that any adverse action, such as levy of higher interest or a recall of the facility, will be invoked by the lenders on account of the above breaches,'' it said.

As of the date of these financial results, none of the lenders has intimated any remedial action, Spandana Sphoorty said.

Shortly prior to her resignation and subsequent to the September quarter, Gangireddy had transferred certain IT systems of the holding company and its subsidiaries to a new IT vendor and outsourced its maintenance to that vendor, causing certain disruptions in the IT operations of the group.

''The holding company has retrieved the relevant internal data back-up and performed necessary reconciliations.

''For the period subsequent to September 30, 2021, the holding company is compiling and validating the borrower collection database through field checks in a new robust parallel IT environment,'' it said.

In late November, two top executives of rival Bharat Financial Inclusion Ltd (BFIL) -- a fully owned subsidiary of IndusInd Bank -- had resigned to join Spandana Sphoorty.

Spandana announced Shalab Saxena, the then MD & CEO, and Ashish Damani, the then executive director and CFO of BFIL, were to join the company as MD & CEO and president and CFO, respectively.

Spandana and BFIL were apparently at loggerheads about these appointments. IndusInd Bank said Saxena and Damani were still employed with BFIL, countering that they were appointed by Spandana.

Hyderabad-headquartered SSFL has a presence in 18 states. It has over 1,000 branches with a customer base of around 25 lakh.

Shares of SSFL on Wednesday closed 4.95 per cent lower to Rs 414.80 apiece on the BSE.

(With inputs from PTI)

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