Fusion Finance (FUSION) Q2 25/26 earnings summary

Executive summary

• Disbursements grew 37% sequentially in Q2 FY26 to INR 1,298 crore, with AUM at INR 7,038 crore and active borrower base at 25.8 lakh across 1,545 branches in 22 states and 3 Union Territories.

• Credit costs declined for the fourth consecutive quarter to INR 111 crore, with GNPA at 4.61% and NNPA at 0.38%; collection efficiency improved to 98.85%.

• Governance strengthened with appointment of a BFSI veteran as independent director, a dedicated Chief Compliance Officer, and resignation of founder/director.

• Operational improvements include digital onboarding, enhanced risk analytics, and productivity gains despite reduced headcount.

• Balance sheet remains healthy with CRAR at 31.31% and liquidity of INR 892 crore as of September 2025.

Financial highlights

• Disbursements in Q2 FY26 were INR 1,298 crore, up 37% sequentially; H1 FY26 disbursements totaled INR 2,248 crore.

• Gross NPA declined to 4.61% and net NPA remained at 0.38%; collection efficiency improved to 98.85%.

• Pre-provision operating profit stood at INR 89 crore; cost-to-income ratio at 70.2%.

• Net loss narrowed to INR 22 crore in Q2 FY26 from INR 92 crore in Q1 FY26 and INR 305 crore in Q2 FY25.

• NIM expanded to 10.9% in Q2 FY26 from 10.3% in Q1 FY26.

Outlook and guidance

• Disbursements expected to surpass repayments by December-January, turning the book to growth.

• Credit cost guidance for ongoing periods is around 3.5%, with internal modeling targeting sub-2.5%.

• Focus on sustainable growth in microfinance and MSME segments, leveraging a robust capital base and strengthened governance.

• Collection efficiency improved to 98.5% overall and 99.5% for the new book.

• Disbursements are being strategically rebalanced across states in response to portfolio performance and sectoral headwinds.