Spandana AUM rose 31% as branch network and staff shrank

Spandana Sphoorty Financial Limited increased assets under management (AUM) 31% year on year to ₹5,364 crore at September 2026 while its branch network declined to 1,438 from 1,703 and employee count fell to 9,908 from 13,400. Disbursements rose 135% year on year in H1 FY27 and collection efficiency also increased.

How did Spandana grow AUM with fewer branches?

Spandana grew AUM by ₹1,276 crore, from ₹4,088 crore at September 2025 to ₹5,364 crore at September 2026, while reducing its branch count by 265. AUM also rose 10% sequentially from ₹4,887 crore at June 2026, indicating portfolio growth continued as the network moved from 1,443 branches to 1,438 over that quarter.

The reduction covered each reported branch format. Monthly branches fell from 1,099 at September 2025 to 945 at September 2026, weekly branches declined from 428 to 348, and CFL branches decreased from 176 to 145. Total branches had already fallen to 1,457 by March 2026, leaving a further reduction of 19 branches over the next two quarters.

What supported Spandana’s AUM expansion during the network reduction?

Spandana’s reported disbursements and collection efficiency increased during the AUM expansion. Q2 FY27 disbursements rose 59% year on year to ₹1,481 crore from ₹933 crore in Q2 FY26, and were 8% above ₹1,371 crore in Q1 FY27. H1 FY27 disbursements reached ₹2,853 crore, compared with ₹1,214 crore in H1 FY26, an increase of 135%.

Gross collection efficiency increased to 97.9% in Q2 FY27 from 92.9% in Q2 FY26, while net collection efficiency rose to 97.3% from 92.4%. The active customer base, however, was 11.4 lakh at September 2026, below 15.5 lakh a year earlier, although it rose from 11.1 lakh at June 2026. The top five states accounted for 57% of AUM, with the rest of India representing 43%.

How far did Spandana reduce its workforce and loan officer base?

Spandana reduced total employee count by 3,492 to 9,908 at September 2026 from 13,400 a year earlier. Spandana Sphoorty Financial Limited (SSFL) employees declined from 11,744 to 9,087, while CFL employees decreased from 1,656 to 821. The workforce had stood at 10,776 at March 2026 and 10,195 at June 2026.

The reported combined count of loan officers and other listed roles declined by 2,029 to 6,650 at September 2026 from 8,679 at September 2025. SSFL accounted for 6,203 of the September 2026 total and CFL for 447, compared with 7,716 and 963 respectively a year earlier. From June to September 2026, the total declined by 99, compared with a 287-person reduction in overall employees.

What were the financial effects of Spandana’s smaller operating base?

Spandana reported higher income and lower expenses in Q2 FY27. Total income rose 42% year on year to ₹340 crore, while total expenses fell 21% to ₹148 crore from ₹189 crore in Q2 FY26. Employee benefit expense declined 21% to ₹103 crore, other expenses fell 22% to ₹43 crore, and depreciation and amortisation expense decreased 40% to ₹2 crore.

Pre-provision operating profit (PPOP), including recovery of loans written off, was ₹79 crore in Q2 FY27, compared with ₹40 crore in Q1 FY27 and a loss of ₹40 crore in Q2 FY26. Profit before tax was ₹37 crore and profit after tax was ₹18 crore, versus ₹18 crore and ₹12 crore respectively in the preceding quarter. The operating-expense-to-AUM ratio was 11.4%, down from 13.3% in Q1 FY27 and 16.3% in Q2 FY26.

What do collections, asset quality and funding show about Spandana’s growth?

Spandana reported lower non-performing asset ratios alongside higher collection efficiency. Gross non-performing assets (GNPA) declined to 2.54% in Q2 FY27 from 3.64% in Q1 FY27 and 5.62% in Q2 FY26. Net non-performing assets (NNPA) decreased to 0.50%, from 0.68% sequentially and 1.17% a year earlier; consolidated Stage 3 loans were ₹132 crore with ₹106 crore of expected credit loss provisions and 80.2% coverage.

Borrowings outstanding increased to ₹4,724 crore at September 2026 from ₹3,289 crore a year earlier as AUM expanded. Banks accounted for 57% of borrowing, compared with 48% at September 2025, while capital markets accounted for 23%, down from 29%. The marginal cost of borrowing was 10.6% in Q2 FY27, compared with 13.2% in Q3 FY26, and net interest margin was 13.6% in Q2 FY27 versus 8.4% a year earlier.

Conclusion

Spandana combined a ₹1,276 crore year-on-year increase in AUM with lower branch, employee and reported loan officer counts. Higher H1 FY27 disbursements, collection efficiency of 97.9% and lower Q2 FY27 expenses coincided with profit after tax of ₹18 crore, compared with a loss of ₹249 crore in Q2 FY26.

The next point to watch is whether Spandana can sustain growth through the physical infrastructure it describes as optimal for future growth. The presentation gives no numerical branch or workforce target, leaving subsequent AUM, disbursement, collection-efficiency and expense-ratio data to show how the model performs with 1,438 branches.