Spandana cut FY27 AUM guidance by 7% without explanation
Two months after targeting a ₹6,500 cr AUM exit, management now expects 'slightly above ₹6,000 cr'; also lowered 90+ recovery outlook and changed LOS vendor identity.
What's new
- AUM rose 11% QoQ to ₹4,887 crore, but FY27 exit target cut to ~₹6,000 crore.
- NIM surged to 12.5% from 9.9% on better mix and lower funding costs.
- PAT doubled QoQ to ₹12 crore, helped by ₹51 crore in 90+ pool recoveries.
- New loan product pilot in Madhya Pradesh; 100 underperforming branches to be revived.
Themes from the call
Growth
AUM growth of 11% QoQ but FY27 exit guidance reduced from ₹6,500 cr to ~₹6,000 cr, signalling caution on pace.
Margins
NIM expanded to 12.5% from 9.9% as yield rose 180 bps to 24.6% and funding costs fell to 12.8% from 13.2%.
Asset quality
Gross NPAs fell to 3.6%; new-book mix at 91% with 99.4% collection efficiency. Annualized credit cost dropped to 2.1% from 3.2%.
Guidance watch
- FY27 AUM exit: slightly above ₹6,000 crore (down from ₹6,500 crore)
- FY27 disbursements: ₹6,000-6,500 crore
- FY27 gross credit cost: 2.5%-3.0%; net near nil if ₹150-200 crore recoveries achieved
- 90+ pool recoveries: ₹150-200 crore in FY27 (monthly run rate 16-18 crore, down from prior 20-25 crore target)
- Individual loan pilot: 8 branches in MP over next 3 months; broader rollout conditional
- March 2028 AUM aspiration of ~₹10,000 crore explicitly called 'not formal guidance'
Risk flags
- AUM guidance cut of ~7% in two months undermines credibility of forward statements
- 90+ recovery trajectory lowered without explanation; ₹20-25 crore monthly target now seen as difficult
- LOS platform vendor changed from Perfios to JAM/Perfinza without acknowledgment, raising execution risk
- Conflicting ROA references (1.0% vs 2.5%) for FY27; BAU 3.5% feasible only for FY28
- Geographic concentration: top states account for 60% of portfolio; expansion into TN and MH is early stage
Key quotes
-
"This is the last year we are going to focus on this so-called 90+ book because, after that, we do not expect customers who are two years or more past due to be paying us."
— Venkatesh, Management -
"So, if all goes well, we should be closer to about INR6,500 crores AUM by FY27."
— Management, May 2026 call -
"This year we are aiming for a March exit slightly above 6,000 crores."
— Management, July 2026 call
The brief
Spandana SphoortyFin's Q1 print showed real operational progress: AUM up 11% QoQ, NIM doubling to 12.5%, PAT at ₹12 crore versus ₹5 crore last quarter. The new-book quality is visibly better — 91% of the portfolio now originates under revised SRO norms with 99.4% collection efficiency. Credit cost fell to 2.1% annualised from 3.2%, helped by ₹51 crore in recoveries from the legacy 90+ pool. Funding costs are also improving, with incremental cost at 11.3% and bank share rising to 47%.
But the guidance track record is eroding confidence. Two months ago management said FY27 exit AUM would be ~₹6,500 crore. This quarter it revised to slightly above ₹6,000 crore — a 7% cut — without explanation. The 90+ recovery target was similarly walked back: from ₹20-25 crore per month to an average of 16-18 crore, with management now saying 20 crore looks difficult. Even the LOS platform story changed: what was described as a Perfios build in January and May is now coming from JAM under the name Perfinza, with no mention of the switch.
Management is candid about the 90+ pool being a focus for only one more year, and the new individual loan pilot is sensible and measured. Yet the pattern of shifting guidance without transparency — on AUM, recoveries, and technology — makes it harder to underwrite the FY28 aspirations, especially the aspirational ₹10,000 crore AUM target. The operational recovery is real; the credibility of forward statements is not.
Spandana's operational turnaround is genuine, but the guidance gaps on AUM, recoveries and platform execution make the story harder to trust at current prices.