Fusion Finance (FUSION) Q3 25/26 earnings summary

Executive summary

• Returned to profitability in Q3 FY26 with PAT of INR 14 crore, driven by improved asset quality, strong collections, and calibrated growth.

• Leadership strengthened with new CFO and independent director appointments, enhancing financial and strategic capabilities.

• Auditors confirmed that prior going concern issues are resolved, reflecting business stability and strengthened balance sheet.

• Collection efficiency improved to 99.14% in Q3 FY26, with new book at 79% of portfolio and 99.56% CE.

• Net Interest Margin (NIM) rose to 11.32% in Q3 FY26 from 10.85% in Q2 FY26.

Financial highlights

• Q3 disbursements rose 23% QoQ to INR 1,594 crore, the highest in five quarters; AUM at INR 6,876 crore as of December 2025.

• Total income for Q3 FY26 was INR 424 crore; net interest income at INR 237 crore.

• Pre-provision operating profit (PPOP) was INR 94 crore; excluding a one-time labour code charge, PPOP would have been INR 100 crore.

• Cost-to-income ratio for Q3 was 68.9%, with operating costs nearly flat quarter-on-quarter.

• Gross NPA declined to 4.38%, net NPA at 0.60%-0.63%; ECL provisions reduced to INR 353 crore from INR 440 crore in Q2.

Outlook and guidance

• Targeting AUM of over INR 10,000 crore in FY27, with MSME book expected to double.

• Credit cost on stable book projected at 3.25%-3.75%; OPEX as a percentage of income expected to decline as growth resumes.

• Recovery target of INR 50 crore per quarter from written-off and overdue portfolios, aiming for INR 200 crore over the next year.

• Focus on calibrated disbursement growth and maintaining high portfolio quality.

• Continued improvement in credit costs and asset quality expected.