Fusion Finance (FUSION) Q4 20/21 earnings summary

Executive summary

• FY21 delivered a near U-shaped recovery after lockdown disruption: operations returned to pre-Covid levels by September and reached record volumes by December; fourth-quarter performance was described as unprecedented.

• AUM rose 28%, revenue 20%, and client base 3% per the MD & CEO; year-end network reached 725 branches across 18 states.

Financial highlights

• Revenue from operations was ₹8,558.12m and total income ₹8,730.88m for FY21, versus ₹7,303.11m total income in FY20.

• Profit for the year fell to ₹439.44m from ₹696.10m; profit before tax was ₹567.91m versus ₹999.95m.

• Disbursements were ₹3,710.30 crore, up 5.81% YoY; gross loan portfolio reached ₹4,637.84 crore, up 28.93% YoY.

• Impairment on financial instruments rose to ₹2,207.80m from ₹926.99m; finance costs were ₹3,751.04m versus ₹3,376.72m.

• Basic EPS was ₹5.56 versus ₹10.47; diluted EPS was ₹5.49 versus ₹10.32.

Outlook and guidance

• FY22 recovery remained exposed to the duration of the second Covid wave, further waves, restrictions, regulatory changes, collection efficiency, and borrower income generation.

• ₹1,250 crore of liquidity was available at March 31, 2021, with a further ₹350 crore received in April; liquidity was positioned to support growth and withstand possible restrictions.

• MSME lending was expected to grow into a key future driver; organic expansion in existing states and repeat/referral lending were identified as MFI growth levers.