Fusion Finance
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Fusion Finance is poised for a sustainable growth trajectory, driven by management's strategic focus on granular portfolio expansion and improved asset quality. Recent commentary highlights a successful transition to disciplined growth, with tighter underwriting standards enhancing credit quality and collection efficiency. The company's capital adequacy, with a 37% CRAR, supports its growth ambitions, particularly in scaling the MSME segment to 20% of AUM by FY28. Vista's financial outlook reflects expectations of accelerating revenue growth and improving margins, underpinned by a favorable macro environment and government initiatives supporting MSME financing. However, execution risks related to branch rationalization and technology adoption remain critical watchpoints. Over the next 12-24 months, opportunities include leveraging deferred tax assets for earnings support and expanding into new geographic markets. Conversely, headwinds may arise from the concentrated unsecured lending model and potential volatility in the macroeconomic landscape. Overall, Fusion Finance's strategic initiatives align with Vista's forecast of continued long-term growth, with a target price of approximately 215.86, indicating an expected upside of 5.3%
Why We Like This Stock
- Management's focus on high-quality, lower-leverage customers is enhancing asset quality and collection efficiency
- The company's strong capital adequacy allows for sustained growth without immediate equity raises
- Strategic geographic expansion and product diversification are expected to drive revenue growth
Things To Watch Out For
- Execution risks related to branch rationalization and technology adoption could hinder growth
- The concentrated unsecured lending model poses risks in a volatile macro environment
- Potential challenges in maintaining credit discipline amidst increasing competition
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 1,526 | 1,476 | 1,160 | 1,198 | 1,271 |
| Profit Before Tax (Cr.) | 663 | -1,133 | -63 | 322 | 264 |
| PBT Margin | 43.4% | -76.8% | -543.1% | 26.9% | 20.8% |
| Net Profit (Cr.) | 491 | -1,134 | -63 | 241 | 198 |
| Earnings Per Share | 30.4 | -70.2 | -3.9 | 14.9 | 12.2 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| ICICI Securities | ▲ Buy | 240 | 11-Aug-2026 |
| Motilal Oswal | ▲ Buy | 260 | 11-Aug-2026 |
Company Overview
Show Company Profile
Fusion Finance Limited, a non-banking financial company, provides micro finance lending services to women entrepreneurs in rural and semi-urban areas in India. The company offers income generation, top up, emergency, and cross sell loans; and unsecured, secured, and solar business loans. The company was formerly known as Fusion Micro Finance Limited and changed its name to Fusion Finance Limited in July 2024. Fusion Finance Limited was incorporated in 1994 and is headquartered in Gurugram, India.