Buy Spandana Sphoorty; target of Rs 1400: Motilal Oswal

Motilal Oswal is bullish on Spandana Sphoorty recommended buy rating on the stock with a target price of Rs 1400 in its research report dated January 22, 2024.

Broker Research

January 23, 2024 / 14:26 IST

Buy

26 Aug, 2025 12:21

Volume

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Motilal Oswal's research report on Spandana Sphoorty

PAT grew 79% YoY to ~INR1.27b (in line) in 3QFY24, driven by other income despite elevated high credit costs. 9MFY24 PAT stood at INR3.7b (vs. INR932m loss in 9MFY23). In 3QFY24, NII was up 46% YoY but flat QoQ at ~INR3.2b (in line). PPoP declined 7% QoQ to INR2.4b because of lower assignment income of ~INR200m (vs. INR420m in 2QFY24). Spandana continued to pursue customer acquisition-led growth with the addition of ~340K customers (down 3% QoQ). The total borrower count rose ~10% QoQ to 2.96m. Spandana has refined its processes by adopting the right tools and technologies. The new management team has fortified governance and risk controls and scaled up multiple technology-related initiatives to further refine the JLG processes. Spandana trades at 1.6x Mar’26E P/BV, with RoA/RoE of 4.6%/17% in FY26E.

Outlook

Given the strong opportunity in the microfinance sector, we think Spandana is poised for a further rerating if it executes well on its stated goal of quality growth. Maintain BUY with a TP of INR1,400 (premised on 2.0x FY26E BV).

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