Neutral Spandana Sphoorty; target of Rs 280: Motilal Oswal

Motilal Oswal's research report on Spandana Sphoorty

Spandana Sphoorty (SPANDANA)’s 2QFY26 loss stood at ~INR2.5b (vs. MOFSLe loss of INR2.4b). NII dipped 70% YoY to ~INR1.05b (in line). Opex declined ~14% YoY to ~INR1.9b (in line). Operating loss stood at INR690m (PQ: operating loss of ~INR590m). Total borrower count declined ~18% QoQ to 2m. Credit costs declined to ~INR2.6b, resulting in annualized credit costs of ~27% (PQ: ~34% and PY: ~21%). This included an additional credit cost of INR860m in 2QFY26 due to accelerated technical write-offs. Excluding this, the credit costs would have been INR1.7b.

Outlook

Given this delayed recovery trajectory and muted near-term catalysts, we maintain our Neutral rating on the stock with a TP of INR280 (based on 0.9x Sep’27E P/BV).