From Rs 70 cr to Rs 330 cr: SKS Micro losses just keep piling

Shares of SKS Microfinance tanked nearly 20 percent to a record low in the morning trade today after the company reported a loss of Rs 330 crore for the quarter ended 31 March, 2012.

After opening weak, shares of the micro finance lender slid further and lost 19.9 percent to hit a record low of Rs 75.85 on the BSE.

At the NSE, the stock plunged 14.52 percent to a new low of Rs 80.90.

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The stock has recovered most of its losses and is now trading down 5 percent at Rs 90.

The stock saw the heavy sell off today after the company reported its fourth quarter numbers yesterday evening. SKS Microfinance has suffered a loss of Rs 330 crore in the quarter ended 31 March, 2012, up from Rs69.77 crore loss in the same quarter last year, up 371 percent.

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The company allotted Rs 278 crore under provisions and write-offs in the fourth quarter which has taken total provisioning to Rs 1,173.5 crore for the whole fiscal due to non-collection of Andhra Pradesh dues.

Total income for the quarter fell 69 percent to Rs 50 crore over the same quarter last year. Despite heavy provisions which might feel like reduction of bad portfolio, there is not much to cheer as well. Loan disbursement which came at Rs 793 crore is almost flat over Rs 786 crore in the fourth quarter last year.

Over the same time, its loan book has come down from Rs 2706 crore to Rs 1320 crore. Even the capital adequacy ratio has come down from 44.3 percent to 35.4 percent from last quarter.

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The only hope lies in an 11 percent loan book growth for non Andhra Pradesh states which reverses the declining trend over the past few quarters.

But the biggest dampener seems to be the provisioning. The company has set aside Rs 277 crore even after providing for more than Rs 350 crore for each of the last two quarters. The market is perhaps scared as it is still not clear how deep is the rot. The Andhra Pradesh portfolio still comprises of 16 percent of the total loan book and repayments have been poor. The Street reflects the fear that the pain might not be over yet.