The company reported a profit of INR111 crore a year ago. SKS Microfinance shares dropped 1.35 percent to INR94.70 at close of trading in Mumbai on Monday. The stock's 52-week low price is INR85.
SKS was at the heart of the 2010 crisis that hit India's microfinance sector after the southern Andhra Pradesh state, the nucleus of microfinance activity back then, imposed new laws to regulate the industry in that State. SKS had maximum exposure in Andhra Pradesh.
J.S. Sai, the executive vice president for public affairs at SKS attributes the loss to the company “systematically writing off loans in Andhra Pradesh over the last four to five quarters.”
Sai said the new law, of 2010, impacted collections from Andhra Pradesh that dropped by almost 90 percent. SKS, which had maximum exposure in this one state, has now brought down its residual Andhra Pradesh exposure (net) to INR236 crore, from a high of INR1,491 crore in October 2010, according to a company release.
The company's market cap is INR685 crore.