Fusion Finance gains over 4% as Q1 results show asset quality boost

Fusion Finance shares rose on improved Q1 performance, with lower credit costs, better asset quality, narrower losses, and stronger operational efficiencies

Shares of Fusion Finance, a microloans provider, gained 4.3 per cent on Monday following an upbeat performance in the quarter ended June 2025 (Q1). The stock closed at Rs 154, trimming its year-to-date loss to 11 per cent.

 

The latest rise came on the back of improved financial metrics and operational efficiencies.

 

Fusion Finance saw credit costs decline to Rs 178 crore (2.3 per cent) from Rs 253 crore (2.9 per cent) in Q4 FY25.

 

The gross non-performing asset (NPA) ratio improved to 5.43 per cent from 7.92 per cent in the previous quarter, while net NPA fell to 0.19 per cent from 0.30 per cent.

 

Quarterly net losses narrowed to Rs 92.25 crore, compared to Rs 164.5 crore in Q4 FY25, supported by reduced credit costs and higher net interest margins.

 

During its earnings call, Fusion’s management struck an optimistic note. 

 

“Q1 performance reflects the early impact of the strategic actions we took last year. Credit costs have moderated, collections remain robust, and our operating model is delivering with greater consistency. With renewed confidence and sharper execution, we are well-positioned to build momentum through the year and drive long-term value creation,” said Devesh Sachdev, Managing Director, Fusion Finance.

 

The company said it disbursed Rs 950 crore in Q1. Its assets under management stand at Rs 684 crore, with approximately 91 per cent secured. Fusion Finance reported a capital adequacy ratio of 29.52 per cent and liquidity of Rs 724 crore as of June 30, 2025.

 

Warburg Pincus-backed Fusion has secured Rs 1,500 crore worth of fresh funding since January 2025. 

Shares of microfinance firms have been under pressure over the past year amid an uncertain outlook.