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Fusion Finance posts loss of ₹ 305 crore in Q2 FY25; impairment charge at ₹ 694 crore 
(13:29, 16 Nov 2024)

Total income rose by 23.19% year-over-year (YoY) to ₹ 703.71 crore during the quarter.

Net interest income (NII) improved by 30.46% to ₹ 397.29 crore in Q2 FY25 from ₹ 304.54 crore in Q2 FY24. Net interest margin in Q2 FY25 was 11.48% in Q2 FY25 as against 11.12% in Q2 FY24.

Accordingly, the NBFC's pre-provision operating profit (PPOP) for the second quarter was ₹ 283.84 crore, up 17.39% YoY.

The impairment charge on financial instruments increased sharply to ₹ 694.05 crore in Q2 FY25 from ₹ 76.20 crore in Q2 FY24. Expected credit loss (ECL) provision jumped to ₹ 1,140.62 crore in Q2 FY25 from ₹ 300.24 crore in Q2 FY24.

Consequently, the company posted a pre-tax loss of ₹ 410.21 crore in Q2 FY25. The firm had recorded a pre-tax profit of ₹ 165.59 crore in Q2 FY24.

Gross NPA was 9.41% as on 30 September 2024 as against 2.68% as on 30 September 2023 and 5.46% as on 30 June 2024.

Disbursements stood at ₹ 1,661 crore in Q2 FY25, which is lower by 29.13% as compared with the quantum of ₹ 2,343.77 crore disbursed in Q2 FY24.

Asset under Management (AUM) grew by 15.41% to ₹ 11,571 crore in Q2 FY25 from ₹ 10,026 crore in Q2 FY24.

Devesh Sachdev, MD & CEO, Fusion Finance, said: 'During Q2 FY25, we continued to experience the impact of delinquency trends seen industry-wide, making this a tough quarter.

As shared previously, we have been closely tracking the evolving credit behaviour of the borrowers and have implemented strong measures to tighten credit criteria for new disbursements along with an increased focus on field collections and have also curtailed our growth resulting in muted AUM numbers QoQ basis.

Our ECL provisioning for this quarter is higher, thus impacting our overall profitability. Having said that, our pre-provisioning profit (PPOP) on YoY basis remains steady, and we continue to have a strong balance sheet with a healthy CAR of 24.39%.

We expect to file the documents for rights issue of up to ₹ 550 crore in this quarter. As we continue to take a calibrated approach, our focus will be on treading the prudent growth path.'

Fusion Finance is amongst India's leading non-banking financial company-microfinance institutions (NBFC-MFIs). The company has been growing consistently with an extensive network of 1,463 branches spread across 22 states including 3 Union Territories, as of 30 September 2024.

The scrip had tumbled 4.99% to end at ₹ 177.85 on the BSE on Thursday.

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