Micro-finance company Fusion Finance has successfully returned to profitability in Q3 FY26, reporting a profit after tax of ₹14 crore compared to a loss of ₹22 crore in the previous quarter. According to reports from The Hindu BusinessLine, the Warburg Pincus-backed company's profitability would have been even higher at over ₹21 crore barring a one-time impact of ₹7 crore for new labour codes. This marks a significant improvement in the company's operational performance.
The company's asset quality indicators strengthened during the December quarter, with gross NPA easing to 4.38% from 4.61% in September. As reported by The Hindu BusinessLine, loan disbursement rose 23% quarter-on-quarter to ₹1,594 crore, representing the highest level in the past five quarters and reflecting gradual pick-up in business momentum. The focus on strengthening portfolio quality and pursuing calibrated growth has contributed to this improvement in asset quality metrics.
Margin performance improved significantly with net interest margin expanding to 11.32% in the December quarter from 10.85% in the previous quarter, aided by lower cost of funds and improving portfolio quality. According to the company's financial results, credit costs declined sharply to ₹79 crore from ₹111 crore sequentially, supporting earnings growth and demonstrating effective cost management strategies.
The company maintained a strong financial position with a capital adequacy ratio of 39%, supported by the recently completed rights issue. As reported by The Hindu BusinessLine, liquidity stood at ₹1,783 crore, comprising cash, cash equivalents, and liquid assets, amounting to 23% of total assets. Assets under management declined marginally by 2.3% to ₹6,876 crore, highlighting the company's focus on tighter underwriting standards.
MD & CEO Sanjay Garyali emphasized the company's continued focus on strengthening core fundamentals, maintaining portfolio quality, and pursuing calibrated growth. According to The Hindu BusinessLine, the improvement in collections across both the overall portfolio and the new book reinforced the resilience of the company's business model. The company's strategic approach to quality lending and operational efficiency has contributed to this successful turnaround in financial performance.
