Spandana Sphoorty, a prominent microfinance lender, announced its Q1 FY26 results on 14th August 2025, posting a significant downturn in profitability despite revenue visibility. The company slipped into deep losses, with profit after tax (PAT) falling to -₹360.19 crore from ₹55.71 crore in the same quarter last year.
The results reflect challenges in loan recovery, asset quality pressures, and rising provisions, leading to heavy losses. The decline in profitability comes even as revenue numbers show sharp contraction compared to the previous year.
Spandana Sphoorty Q1 FY26 Performance
For the quarter ended 30th June 2025, consolidated results revealed:
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Revenue from Operations: ₹300.46 crore (Q1 FY26) vs ₹706.97 crore (Q1 FY25), down 57.50% YoY.
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Profit Before Tax (PBT): -₹322.90 crore (Q1 FY26) vs ₹338.83 crore (Q1 FY25).
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Profit After Tax (PAT): -₹360.19 crore (Q1 FY26) vs ₹55.71 crore (Q1 FY25), reflecting a steep fall of -746.54% YoY.
The sharp fall in revenue and a swing from profit to heavy loss marks one of the most challenging quarters for the company.
Standalone vs Consolidated Results
The standalone performance also mirrored the decline:
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Standalone Revenue: ₹261.87 crore (Q1 FY26) vs ₹660.73 crore (Q1 FY25), down 60.37% YoY.
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Standalone PAT: -₹328.91 crore (Q1 FY26) vs ₹51.29 crore (Q1 FY25), down 741.28% YoY.
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Standalone PBT: -₹296.42 crore vs ₹319.24 crore last year.
Both consolidated and standalone figures show significant revenue compression and steep losses, highlighting systemic issues within operations and portfolio stress.
Spandana Sphoorty Q1 FY26 Highlights
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Revenue fell 57.50% YoY to ₹300.46 crore (consolidated).
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PAT slipped into a loss of -₹360.19 crore, compared to a profit of ₹55.71 crore last year.
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Standalone revenue dropped 60.37% YoY, while standalone PAT showed a steep decline to -₹328.91 crore.
Share Price Performance
Despite the weak results, Spandana Sphoorty shares opened positively at ₹242.00 per share on 18th August 2025 and are currently trading higher at ₹244.95 per share, indicating some buying support in anticipation of recovery.
Looking at long-term performance:
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1-Year Returns: -57.75%
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5-Year Returns: -57.25%
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Maximum Returns: +94.82%
The stock has eroded significant investor wealth over the past year, though it has generated positive returns since listing.
Analyst Expectations
Interestingly, analysts maintain cautious optimism after Q1 FY26 results. While the company reported steep losses, they expect restructuring, cost controls, and loan recovery measures to drive stabilization in the coming quarters.
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Upside Target: ₹302.40 per share in the next year.
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Downside Risk: ₹220.00 per share in case of prolonged weakness.
Analysts highlight that while the results are weak, the stock’s valuation may attract speculative interest given its historical volatility.
Key Factors Behind Losses
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Sharp Drop in Revenue – Consolidated revenue fell over 57% YoY, indicating weaker disbursements and income streams.
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High Provisions and Costs – Losses reflect rising provisioning for loan losses and asset quality stress.
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Operational Pressures – Both consolidated and standalone numbers show contraction, suggesting structural issues beyond cyclical weakness.
Risks to Watch
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Asset Quality Stress: Rising defaults or delayed recoveries could further pressure margins.
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Market Volatility: Share prices remain volatile due to weak earnings visibility.
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Sustainability: Profit turnaround will depend heavily on effective restructuring and improved credit conditions.
Conclusion
Spandana Sphoorty’s Q1 FY26 results revealed a tough start to the year, with revenue down 57.50% YoY and PAT plunging to a net loss of ₹360.19 crore. The steep decline highlights persistent stress in operations, loan recovery, and asset quality.
Despite the weak financials, analysts see room for price appreciation in the medium term, setting a target of ₹302.40 per share, although downside risks to ₹220.00 per share remain.
For investors, Spandana Sphoorty remains a high-risk, high-volatility stock. A turnaround will depend on how effectively the company addresses its operational challenges and stabilizes profitability in subsequent quarters.
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