Spandana Sphoorty returns to Q2 profit as impairment falls

Spandana Sphoorty Financial Limited returned to standalone profit of Rs 34.74 crore for the quarter ended September 30, 2026, from a Rs 218.07 crore loss a year earlier. Impairment on financial instruments fell to Rs 2.80 crore from Rs 218.47 crore, while standalone loans rose to Rs 4,759.09 crore from Rs 3,629.24 crore at March 31, 2026.

How did Spandana Sphoorty perform in the quarter ended September 30, 2026?

Spandana Sphoorty reported standalone profit after tax of Rs 34.74 crore for the quarter ended September 30, 2026, against a loss after tax of Rs 218.07 crore in the quarter ended September 30, 2025. Profit after tax was also higher than Rs 16.09 crore in the quarter ended June 30, 2026. Basic and diluted earnings per share, which are not annualised for interim periods, were Rs 4.31, compared with a loss per share of Rs 28.68 a year earlier and Rs 2.01 in the preceding quarter.

Total income rose to Rs 318.15 crore from Rs 207.94 crore a year earlier and Rs 279.78 crore in the preceding quarter. Interest income was Rs 296.95 crore, compared with Rs 195.20 crore in the quarter ended September 30, 2025 and Rs 258.34 crore in the quarter ended June 30, 2026. Other income increased year on year to Rs 15.04 crore from Rs 8.62 crore, although it was below Rs 18.23 crore in the preceding quarter.

For the half year ended September 30, 2026, Spandana Sphoorty recorded profit after tax of Rs 50.83 crore, compared with a Rs 546.98 crore loss in the corresponding prior-year half. Half-year total income rose to Rs 597.93 crore from Rs 472.11 crore. The Board approved the unaudited standalone results on October 30, 2026, after review by the Audit Committee.

What caused Spandana Sphoorty's return to profit?

The main reported movement was impairment on financial instruments falling to Rs 2.80 crore from Rs 218.47 crore in the year-earlier quarter. The impairment line was a reversal of Rs 10.22 crore in the quarter ended June 30, 2026, resulting in a Rs 7.42 crore reversal for the half year ended September 30, 2026. This compared with impairment expense of Rs 601.04 crore in the corresponding prior-year half.

Total expenses declined to Rs 270.00 crore from Rs 493.59 crore a year earlier, despite finance costs rising to Rs 135.02 crore from Rs 111.37 crore. Employee-benefit expense decreased to Rs 92.28 crore from Rs 112.45 crore, while other expenses were Rs 38.03 crore against Rs 48.20 crore. Higher total income and lower expenses shifted profit before tax to Rs 48.15 crore from a loss before tax of Rs 285.65 crore.

Tax expense was Rs 13.41 crore in the quarter ended September 30, 2026, following a tax credit of Rs 67.58 crore in the year-earlier quarter. Spandana Sphoorty held a deferred tax asset of Rs 624.38 crore at September 30, 2026, down from Rs 640.63 crore at March 31, 2026. The company said its recognition was based on management's assessment of future taxable profits under Board-approved business plans and involved significant management judgement.

How much did Spandana Sphoorty's loan book expand?

Spandana Sphoorty's standalone loans increased by Rs 1,129.85 crore in the six months to September 30, 2026, reaching Rs 4,759.09 crore from Rs 3,629.24 crore at March 31, 2026. Total financial assets increased to Rs 6,419.72 crore from Rs 5,366.54 crore over the same period. Total assets rose to Rs 7,141.35 crore from Rs 6,176.91 crore.

The loan increase was accompanied by a Rs 736.58 crore increase in borrowings other than debt securities, to Rs 2,476.79 crore at September 30 from Rs 1,740.21 crore at March 31. Debt securities were nearly unchanged at Rs 2,086.65 crore, compared with Rs 2,084.04 crore. In the half-year cash-flow statement, changes in loans used Rs 1,155.39 crore, compared with cash generated from loan changes of Rs 2,048.54 crore in the prior-year half.

Cash and cash equivalents rose to Rs 760.23 crore from Rs 720.33 crore, while bank balances other than cash and cash equivalents fell to Rs 293.81 crore from Rs 493.45 crore. Financing activities generated Rs 928.28 crore of cash in the half year ended September 30, 2026, compared with an outflow of Rs 1,942.21 crore in the prior-year half. The filing recorded Rs 2,916.63 crore of long-term borrowings availed and Rs 2,180.65 crore repaid during the latest half year.

What do Spandana Sphoorty's reported asset-quality and capital ratios show?

Spandana Sphoorty reported Stage III loan assets equal to 2.58% of gross loan assets at September 30, 2026, while net Stage III loan assets were 0.51% of gross loan assets. For these ratios, the filing excludes accrued interest on outstanding loans, inter-corporate advances to related parties and Indian Accounting Standards adjustments from loan assets. The disclosure did not provide comparative asset-quality ratios for March 31, 2026.

The provision coverage ratio was 80.19% at September 30, 2026. Spandana Sphoorty defines the ratio as impairment-loss allowance for Stage III loan assets divided by gross Stage III loan assets. Its capital-to-risk-weighted-assets ratio, calculated under Reserve Bank of India guidelines, was 30.19%, while its liquidity coverage ratio was 403.15%.

Debt securities and borrowings resulted in a debt-equity ratio of 1.88, while total debts to total assets were 0.64 at September 30, 2026. Net worth, defined by the filing as equity share capital plus other equity, was Rs 2,428.67 crore. The reported net profit margin was 10.92% for the quarter and 8.50% for the half year ended September 30, 2026.

Conclusion

Spandana Sphoorty moved from a Rs 218.07 crore standalone loss in the quarter ended September 30, 2025 to Rs 34.74 crore profit in the latest quarter, as total income increased by Rs 110.21 crore and impairment expense declined by Rs 215.67 crore. Loans expanded by Rs 1,129.85 crore in six months, alongside higher borrowings and reported capital and liquidity ratios.

The next disclosed matter to watch is the proposed amalgamation of wholly owned subsidiary Criss Financial Limited with Spandana Sphoorty. The Board approved the scheme on August 14, 2026, but it remains subject to sanction by the National Company Law Tribunal, Hyderabad, and may require shareholder, creditor, Reserve Bank of India and other regulatory approvals.