New Delhi: India's only listed micro lender SKS Microfinance has projected a loss of Rs 300-500 million for the first quarter(Apr-Jun) of the current financial year 2012-13 and has given a gloomy forecast for this fiscal, creating uncertainty over the steady turnaround prospects of the company ever since it plunged into a crisis after the passage of a strict state law.
"Adverse financial performance of the company may continue for the rest of fiscal 2013," SKS Microfinance said in a filing to exchanges Friday.
The company's stocks Friday fell 7.26% to close at Rs 84.30 on the Bombay Stock Exchange (BSE).
SKS Microfinance was unable to redeploy its funds quickly even though its cash and bank balances had risen to Rs 6.89 billion by March 31, 2012, which resulted in relatively lower outstanding loan portfolio, it said.
"These and other factors resulted in our operational income being insufficient to meet the finance costs, personal expenses and operating expenditure," it added.
The micro lender posted a net loss of Rs 3.3 billion during the fourth quarter (Jan-Mar) of the last financial year 2011-12 as compared to a net loss of Rs 697.6 million in the same quarter a year ago, as provisions for bad loans more than doubled.
The microfinance industry plunged into a financial turmoil after the Andhra Pradesh state government introduced a stringent law in October 2010 to curb coercive recovery of loans from borrowers, leading to massive defaults and rising bad loans in micro-finance companies' portfolio.
SKS Microfinance's outstanding loans in Andhra Pradesh mounted to Rs 15 billion earlier last year, before it started to write-off the same.