Spandana Sphoort (SPANDANA)

FairStock Score: 8/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Shares trade at 0.58x book value (₹387.78 per share), offering a Graham-style discount to stated assets.
• Promoter holding is 48.16%, providing reasonable alignment with minority shareholders.
• Piotroski F-Score of 5/9, though modest, suggests not all fundamental indicators are deteriorating.
• Debt/Equity of 1.48 is manageable for a microfinance lender if losses stop.

Concerns

• Latest quarter net loss of ₹83 Cr and ROE of -30.35% show ongoing shareholder value destruction.
• Revenue/sales growth is -59.36%, indicating a severe contraction in the business.
• P/E is zero/meaningless and dividend yield is 0%, offering no earnings or income cushion.
• FairStock Score of 5/100 flags the stock as risky, and continued losses could make the P/B discount illusory.

AI Analysis

Spandana is not a business I would typically want to own. A lender whose latest quarter loses ₹83 crore on revenue of ₹207 crore is destroying value, and the numbers confirm it: return on equity is –30.35%, return on capital employed is –3.87%, and sales have collapsed 59.36% from the prior period. The P/E is meaningless because there are no earnings; at ₹223.73 the market is pricing the company at only 0.58 times book value, while book value stands at ₹387.78. Ben Graham taught me to look for a margin of safety, and the discount to book is the only clear one here. But a low price-to-book is a trap if the assets are not worth the stated value. With a debt/equity ratio of 1.48, continued losses could keep eroding capital. The 79.04% 'profit growth' sounds positive, but it is a small improvement off a deeply negative base, not evidence of durable profitability. Microfinance is a competitive, credit-sensitive business; I see no proprietary moat. Promoter holding at 48.16% is decent, and the Piotroski score of 5/9 suggests not everything is deteriorating. Still, I need evidence of a genuine turnaround: sales growth turning positive, the quarterly loss shrinking or disappearing, and book value stabilising. Even at this discount, I would not rush in. The stock deserves a place on the watchlist, not the wallet. If the company can move toward positive ROE and consistent profits, the asset-play discount could reverse. Until then, this is a speculation on recovery rather than an investment in a high-quality franchise.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer