Spandana Sphoorty sets 23% medium term growth target

Microfinance lender Spandana Sphoorty Financial is targeting to grow at about 23% compounded rate in the next three-four years taking its assets under management to Rs 28000 crore by the end of FY28, according to a vision document prepared by the company.

The growth will be driven by customer acquisitions while keeping ticket sizes lower with a ceiling at Rs 80000, the company said at a meeting with investors. The lender plans to keep the average ticket size per borrower at the current range of about Rs 36000.

The growth guidance over FY25-FY28 is realistic and not aggressive, Motilal Oswal Financial Services said in a note, following the investors/analysts meet.


The lender has rolled out two new products -- loans against property and nano-enterprise loans while it does not plan to cross-sell these products to its micro customers. It may also offer individual retail loans, but it will be less than 5% of the AUM mix.

The lender's gross non-performing assets ratio fell to 1.40% at the end of September against 1.63% three months back. Net NPA was 0.42% against 0.49%. Both the ratios were at 7.37% and 3.84% at the end of September 2022.

"The new management has successfully navigated various disruptions and consequent asset quality stress. With strengthened processes, it is now ready to capitalize on the strong opportunity in the MFI sector," Motilal Oswal said.

Spandana appointed Shalabh Saxena, the former Bharat Financial Inclsuion head, as managing director in November last year.

"We estimate Spandana to deliver FY26 RoA/RoE of 4.4%/17%, aided by operating leverage resulting in decline in operating cost ratios, and normalization in credit costs," the broking and advisory firm said.