Spandana Sphoorty Shares, a microfinance institution, rallied as much as 17.86% on Wednesday, staging a strong recovery in the stock price on the back heavy volumes. The stock price has jumped almost 38% in the last two trading sessions.
The volumes were up 9.23 times as more than 1 crore shares changed hands at a median price of Rs 459.81 on January 08 compared to a weekly average of 10.88 lakh shares. The total market capitalisation of the company stands at Rs 3,285.74 crore while the free float market cap stands at Rs 1,185.81 crore.
The stock “managed to break out of its falling channel, which is kind of a trend reversal at this juncture,” said Rajesh Palviya, Head of Technical Research at Axis Securities. The stock has been continuously in a down-trend since January last year. “This is the first strong buying interest visible in the stock after a correction of almost 12 months. Now, that it has sustained the Rs 450 zone, there is a possibility of a rally up to Rs 550-600,,” added Palviya.
Spandana Sphoorty’s performance in Q2
In the second quarter of FY25, the company’s total Assets Under Management (AUM) came in at Rs 10,537 crore, up 8% year-on-year against Rs 9,784 crore in the same quarter a year ago. The total income in Q2 FY25 stood at Rs 707 crore, a growth of 10% on year compared with Rs 640 crore in Q2 FY24.
Meanwhile, CARE Ratings revised its outlook on the long-term bank facilities and NCD of the company to ‘Negative’ from ‘Stable’ owing to the weakening of profitability and asset quality metrics in the first half of FY25, according to an exchange filing on December 27. This is combined with the expectations of a further rise in delinquencies a consequent uptick in the credit costs and overall weak profitability of the company in the near term.
The rating agency said that it factored in inherent risks involved in the microfinance industry, including unsecured lending, the marginal profile of borrowers, socio-political intervention risk, and regulatory uncertainty.
Spandana Sphoorty Vs Nifty 50
The stock has given a return of 40% in the last five trading sessions, including today’s gains. It has risen 20% in the past one month. However, it has wiped out more than 36% of investors’ wealth in the last six months.
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