ICICI Securities, in its recent report, however, has upgraded the stock to ‘Buy’ from ‘Add’ earlier with a revised target price of Rs 550, signalling a potential upside of 28 per cent in the counter from its previous close of Rs 427.85 on Tuesday.
With a market capitalisation of over Rs 2,900 crore, the shares are trading above the short-term moving averages of 20, 50, and 100-DMA but below 5, 10, and 200-DMA.
The brokerage house highlighted that FY22 had been an eventful year for
(Spandana), starting with the resignation of its erstwhile MD and CEO, which triggered operational instability followed by course correction.
It added that the company appointed new and experienced core management and settled all the disputes with the erstwhile MD by paying a one-time settlement amount of Rs 400 million. Also, Spandana Sphoorty is streamlining the business process as per the revised RBI guidelines and rolling out Vision 2025 with a RoA / RoE target of 4.5/20 per cent, respectively.
Considering the management and the operational stability, improving visibility on earnings recovery led by credit cost normalisation and favourable risk-reward,
has upgraded the stock.
Shares of Spandana Sphoorty Financial plunged more than 8 per cent earlier this week after the company reported a muted performance for the March 2022 quarter.
The company’s consolidated net profit declined by 42 per cent to Rs 28.6 crore in the March quarter (Q4FY22) on one-time settlement fees and transition expenses. It had posted a consolidated net profit of Rs 49.3 crore in the year-ago period.
For the fiscal year 2021-22, the microfinance institution’s net profit declined to Rs 69.8 crore from Rs 145.5 crore in the financial year 2020-21. The total income stood at Rs 1,480 crore in FY22 against Rs 1,505.6 crore in FY21.
On May 30, Spandana informed the stock exchanges about the delay in submitting the financial results for the year ended March 31, 2022, as it was facing disruptions due to management-level problems.
Promoters held a 62.62 per cent stake in the company as of 31-March 2022, while FIIs owned 12.19 per cent, and DIIs 4.22 per cent.
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