Fusion Finance (FUSION) Q1 26/27 earnings summary

Executive summary

• Disbursements grew 88% year-on-year to INR 1,783 crore, with AUM up 4% sequentially to INR 7,702 crore and 36% new customers, reflecting strong business momentum and disciplined lending.

• Profit before tax reached INR 62 crore, up 67% QoQ, and PAT for the quarter was INR 62.41 crore, reversing a loss from the prior year.

• Net Interest Margin improved to 11.93%, up 49 bps QoQ and 160 bps YoY, with credit cost declining to INR 40 crore.

• Collection efficiency remained above 99.75%, with hard bucket recoveries managed in-house using AI and dedicated teams.

• Portfolio reshaped with selective customer acquisition, technology-led management, and improved branch-level risk controls.

Financial highlights

• Total income for Q1 FY27 was INR 458.31 crore, up 7% QoQ and 3% YoY.

• Pre-provision operating profit rose to INR 102 crore, up 10% QoQ and from INR 87 crore YoY.

• Net worth as of June 30, 2026, stood at INR 2,520.69 crore, up 3% QoQ and 30% YoY.

• Return on Assets improved to 3.0%, and Return on Equity to 10.0%.

• Cost of borrowing reduced to 10.1% from 12.6% YoY, with strong liquidity of INR 1,880 crore.

Outlook and guidance

• Targeting INR 10,000 crore AUM by FY 2027, with 20%-25% CAGR growth.

• NIM expected to improve by 15-25 bps by year-end, with further upside if rate environment is favorable.

• Credit cost guidance at 2% annualized, with potential for further improvement.

• MSME share of portfolio expected to reach 15% next year and 20% in two years.

• Focus on sustainable growth with technology enablement, risk framework strengthening, and expansion in MSME and new geographies.