💰 Financial Performance

Revenue Growth by Segment

Consolidated income from operations declined by 1.89% from INR 2,400.57 Cr in FY24 to INR 2,355.16 Cr in FY25. Standalone Asset Under Management (AUM) experienced a significant contraction of 46.16%, falling from INR 11,198.72 Cr in FY24 to INR 6,029.08 Cr in FY25 due to lower disbursements and high write-offs.

Geographic Revenue Split

The loan portfolio is diversified across 19 states and 1 UT. As of September 2025, the top states by AUM contribution are Madhya Pradesh (14%), Odisha (12%), Andhra Pradesh (12%), and Bihar (12%). The top 10 districts account for 14.0% of the total Portfolio Outstanding (POS).

Profitability Margins

Profitability turned negative in FY25 with a consolidated Net Loss of INR 1,035.16 Cr compared to a profit of INR 500.72 Cr in FY24. Return on Assets (RoA) stood at -9.2% on a standalone basis for FY25. Q1 FY26 reported a consolidated net loss of INR 360 Cr, while Q2 FY26 reported a loss of INR 249 Cr.

EBITDA Margin

Consolidated Profit Before Depreciation, Interest and Tax (PBDIT) turned negative at INR -423.84 Cr in FY25, a sharp decline from INR 1,617.76 Cr in FY24, primarily due to high impairment on financial instruments which reached INR 729 Cr in H1 FY26.

Capital Expenditure

Not disclosed in available documents; however, the company merged or closed 101 branches in H1 FY26 to rationalize operations and improve the cost structure.

Credit Rating & Borrowing

Ratings were downgraded in August 2025 to CARE BBB+; Stable and [ICRA]BBB+ (Negative) from A- levels. The downgrade was driven by a net loss of INR 360 Cr in Q1 FY26 and weakened asset quality. Finance costs for FY25 were INR 932.26 Cr (Consolidated).

⚙️ Operational Drivers

Raw Materials

Capital/Debt is the primary 'raw material' for lending. Finance costs represent 39.6% of total consolidated income in FY25. Employee benefit expenses (INR 276 Cr in H1 FY26) are the second-largest cost component.

Import Sources

Not applicable as the company is a financial services provider sourcing capital from domestic banks and capital markets.

Key Suppliers

Debt funding is sourced from a diversified lender base; the company raised INR 4,078.87 Cr in FY25 and INR 598 Cr in the two months preceding October 2025 from various banks and financial institutions.

Capacity Expansion

Current branch network consists of 1,628 branches across 414 districts. While 101 branches were recently rationalized, the company is focusing on increasing productivity per Loan Officer rather than physical footprint expansion.

Raw Material Costs

Finance costs decreased slightly by 2.4% Standalone to INR 875.56 Cr in FY25. Procurement strategy involves diversifying the lender base to manage liquidity, with a Liquidity Coverage Ratio of 416% as of March 2025.

Manufacturing Efficiency

Productivity is measured by disbursement per loan officer; disbursement pace increased to INR 934 Cr in Q2 FY26 from INR 280 Cr in Q1 FY26, a 233% QoQ improvement.

Logistics & Distribution

Distribution is handled via 1,628 branches. Operating costs are being rationalized to improve the earnings profile after reporting significant losses.

📈 Strategic Growth

Expected Growth Rate

233%

Growth Strategy

Growth will be driven by a 233% QoQ increase in disbursements (INR 934 Cr in Q2 FY26), increasing new customer enrollment (up to 22% of loans in Q2 FY26 from 15% in Q1), and raising the maximum ticket size to INR 98,000 from INR 80,000.

Products & Services

Income-generating loans through the Joint Liability Group (JLG) model, Loan Against Property (LAP), and Nano loans.

Brand Portfolio

Spandana, Criss Financial (Subsidiary).

New Products/Services

Expansion of Loan Against Property (LAP) and Nano loans through the subsidiary to diversify the portfolio away from pure microfinance.

Market Expansion

Focusing on 'Bharat' (rural/semi-urban) with a presence in 19 states; current strategy emphasizes deepening penetration in existing districts rather than new state entry.

Market Share & Ranking

Positioned as a leading pan-India MFI player; however, AUM declined 46% YoY in FY25, impacting market share.

Strategic Alliances

Backed by Kedaara Capital, which holds a 48.2% stake as of June 30, 2025.

🌍 External Factors

Industry Trends

The MFI industry is seeing a trend of increasing borrower leverage and tighter regulatory controls. SSFL is positioning for the future by halting new-to-credit acquisitions and limiting lending to borrowers with only two other MFI relationships.

Competitive Landscape

Faces competition from other NBFC-MFIs and banks; industry-wide DPD 180+ portfolio stood at INR 42,394 Cr as of March 2025.

Competitive Moat

Moat is based on a 20-year market expertise and an extensive rural branch network (1,628 branches). Sustainability depends on restoring asset quality (GNPA 4.85% in March 2025) and stabilizing the collection efficiency (92% in Q4 FY25).

Macro Economic Sensitivity

Highly sensitive to rural economic health and inflation; borrower discipline has weakened due to external factors like local disturbances and debt waiver movements.

Consumer Behavior

Shift toward digital payments (13% adoption) and increasing demand for higher ticket sizes (up to INR 98,000).

Geopolitical Risks

Limited to domestic socio-political interventions and state-specific regulations which introduced operational constraints in FY25.

⚖️ Regulatory & Governance

Industry Regulations

Subject to RBI NBFC-MFI guidelines and Ind AS. Recent state regulations in mid-FY25 introduced operational constraints that impacted collection and disbursement.

Environmental Compliance

The company publishes a Business Responsibility and Sustainability Report; specific ESG costs not quantified in snippets.

Taxation Policy Impact

Reported a tax credit of INR 343.64 Cr in FY25 due to losses, compared to a tax expense of INR 169.85 Cr in FY24.

Legal Contingencies

The company noted 'local disturbances and debt waiver movements' as external risks impacting the lending environment, though specific court case values were not disclosed.

⚠️ Risk Analysis

Key Uncertainties

Asset quality remains the primary uncertainty; slippages were INR 552 Cr in Q1 FY26 and INR 396 Cr in Q2 FY26. Further write-offs could keep margins under pressure.

Geographic Concentration Risk

Madhya Pradesh is the highest concentration at 14% of AUM. Top 50 districts represent 42.4% of the portfolio.

Third Party Dependencies

High dependency on banking partners for debt refinancing; a lack of debt mobilization in Q1 FY26 contributed to a 27% degrowth in scale.

Technology Obsolescence Risk

Risk is mitigated by upgrading IT systems for upfront Credit Bureau (CB) validation to reduce processing time and free up field bandwidth.

Credit & Counterparty Risk

High risk due to the unsecured nature of microfinance; Stage 2 and 3 assets were 13.4% as of June 2025, with a write-off of INR 642 Cr (~10% of loan book) in Q1 FY26.