Fusion Finance Ltd Q1FY26 concall decoded: – From Firefighting to Fine-tuning
Opening Hook Microfinance companies usually promise empowerment, but Fusion’s last two years looked more like firefighting drills. Q1FY26 finally offered a breather: credit costs plunged to ₹178 cr (vs ₹571 cr just two quarters ago), GNPA fell to 5.43% (from 7.9%), and losses narrowed to ₹92 cr (Investor Presentation, Aug 11, 2025). Sounds like progress—until you notice disbursements shrank 14% QoQ thanks to stricter guardrails. The sector is betting on India’s $30 trillion dream, but Fusion’s shareholders would settle for break-even by Q3. The big reveal: “we’re out of firefighting mode.” Translation: the hose is off, but the embers aren’t cold yet.
At a Glance • Disbursement ₹950 cr – down QoQ, but quality > quantity mantra • GNPA 5.4% – sharp drop from 7.9% last quarter • NNPA 0.2% – balance sheet looks detoxed • Credit costs ₹178 cr – third straight quarter of decline • Loss ₹92 cr – narrowed from ₹165 cr last quarter • Collection efficiency 98.6% – improving, but still a hawk-eye metric
Management’s Key Commentary “Credit costs declined steadily over three quarters.” → Translation: fire finally under control. “GNPA improved from 7.9% to 5.4%.” → Translation: the patient is stabilizing, but still in ICU. “Our new book is 44% of portfolio, with 99.5% efficiency.” → Translation: only fresh loans behave well. “We revised write-off policy to 180 DPD, taking ₹486 cr upfront.” → Translation: let’s rip off the band-aid. “MSME AUM ₹684 cr with 91% secured book.” → Translation: Plan B: lend against actual property. “OPEX will not rise linearly with growth.” → Translation: tech is cheaper than hiring more foot soldiers. “We are now beyond firefighting.” → Translation: call us cautious optimists, not arsonists.
Numbers Decoded
Metric
The Hero
One-liner
Revenue – The Hero
₹86.6 cr PPOP
Core ops holding despite shrinkage in book.
EBITDA – The Sidekick
NIM 10.3%
Boosted by reversals dropping, but cost of funds 10%+ still bites.
Margins – The Drama Queen
Net Loss ₹92 cr
Better than Q4, but still red ink, not red lipstick.
Analyst Questions Q: When will Fusion turn profitable? A: “Soon, maybe Q2/Q3 if credit costs keep dropping.” → Translation: fingers crossed, models pending. Q: Why shift to preferential allotment vs rights? A: “Quicker
