Submission of Audited Financial Results for the Quarter and Year ended 31st March, 2025
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SPA Capital Services Ltd, a Delhi-based NBFC, reported audited standalone results for FY25 with total income of Rs. 32.94 crore, up about 56% from Rs. 21.08 crore in FY24, driven mainly by sale of services and other operating income. Net profit for the year was Rs. 0.49 crore versus Rs. 0.38 crore last year, while Q4 FY25 net profit stood at Rs. 0.11 crore. However, statutory auditor M/s Dhana & Associates issued a Qualified Opinion, flagging two recurring issues: (1) non-provision of interest expense of Rs. 7.75 lakh on certain outstanding loans, and (2) Rs. 3.14 crore of interest-free loans given to parties that qualify as 'loss assets' under RBI NBFC guidelines but carry no provision. If these qualifications are applied, the company would swing to a net loss of Rs. 3.42 crore and EPS would turn negative at Rs. (11.13). Operating cash flow was also negative at Rs. (2.76) crore in FY25 compared to a positive Rs. 3.27 crore in FY24.
The reported numbers look positive on the surface, but the auditor's recurring qualifications and the fact that adjusted profit turns into a Rs. 3.42 crore loss mean reported earnings significantly overstate the company's true financial position. Shareholders should treat the headline profit with caution, as asset quality on the loan book and proper interest provisioning remain serious concerns. The negative operating cash flow further weakens the picture.