Satya Microcapital Slips into Losses in FY25

21 May 2025

• Financial Performance (FY25 vs FY24): Satya Microcapital reported a 3.2% YoY decline in total income to ₹1,245 Cr in FY25 from ₹1,287 Cr in FY24, primarily due to a sharp fall in fee and commission income (down 34.7%) and fair value gains. Interest income grew modestly by 1.9% to ₹1,041 Cr. However, rising impairment charges and operating costs weighed heavily on profitability. Profit before tax (PBT) plunged into the red, reporting a loss of ₹67 Cr compared to a profit of ₹165 Cr in FY24. Consequently, the company posted a net loss of ₹51 Cr in FY25, reversing from a profit of ₹123 Cr in the prior year. Earnings per share (EPS) dropped significantly to ₹ (7.74) from ₹19.70, reflecting severe pressure on the bottom line.
• Operational Metrics (FY25 vs FY24): Net Profit Margin deteriorated sharply to -4.1%, compared to 9.6% in FY24, highlighting challenges in managing credit quality and operating expenses. Gross NPA (GNPA) improved to 1.22% from 2.16%, indicating a reduction in stressed assets on a gross level. Net NPA (NNPA) also improved to 0.42%, down from 0.99%, suggesting better provisioning and recovery efforts. Provision Coverage Ratio (PCR) increased to 65.4% from 54.5%, offering a stronger buffer against asset quality stress. The loan portfolio contracted by 24.7% YoY to ₹3,729 Cr from ₹4,955 Cr. Total assets declined by 6.4% to ₹5,641 Cr from ₹6,024 Cr. Net worth also fell to ₹959 Cr from ₹1,016 Cr, owing to the reported loss.
• Strategic Developments: FY25 was a challenging year for Satya Microcapital. Despite maintaining decent interest income and improving its asset quality metrics (GNPA and NNPA), the company suffered from high finance costs and impairment losses, leading to a net loss. The reduction in the loan book indicates a cautious lending approach, possibly due to tighter underwriting norms or subdued demand. Going forward, Satya Microcapital needs to stabilize its loan growth, optimize cost structures, and strengthen credit underwriting to return to profitability. Continued focus on recoveries, credit discipline, and operating efficiency will be crucial for a turnaround in FY26.