Fusion Finance (FUSION) Q4 13/14 earnings summary

Executive summary

• FY14 marked rapid, profitable expansion: revenue reached ₹24.96 crore and profit after tax ₹3.01 crore; branches doubled to 42 and active borrowers rose to 127,581.

• Lending focused on women entrepreneurs in Northern and Central India; 80,887 families were served during FY14, with more than 288,139 women reached since inception in 2010.

Financial highlights

• Total income rose 129.94% YoY to ₹24.96 crore; profit after tax increased 988.49% to ₹3.01 crore from ₹0.28 crore.

• Operating costs ratio declined to 10.22% from 10.69%, a 47 bps improvement; operating costs were cited at 10.3% of revenue for FY14 versus 18% in FY12.

• Outstanding loan portfolio reached ₹137.79 crore at March 31, 2014; assets under management were ₹167.51 crore, versus ₹56.76 crore a year earlier.

• Basic EPS was ₹2.81 and diluted EPS ₹1.97, versus a loss per share of ₹0.04 in FY13.

Outlook and guidance

• Planned to expand the branch network to 70 by March 2015 from 42 at March 31, 2014, while reducing loan turnaround time without compromising processes or asset quality.

• Management expected sustainable growth and profitability, supported by risk controls, technology investments, stronger functions and improved liquidity.