Fusion Finance stays in red with Q2 net loss of Rs 305 cr; GNPA hits 9.4%

Weighed down by huge credit costs, microfinance lender Fusion Finance Ltd remained in the red with a net loss of Rs 305 crore in the second quarter of financial year 2025 (Q2FY25), compared to net profit of Rs 125.6 crore a year ago. Sequentially, it had posted a net loss of Rs 35.6 crore in the first quarter of FY25.

 

Devesh Sachdev, Managing Director & Chief executive, Fusion Finance Ltd said in a late night statement, “During Q2FY25, we continued to experience the impact of delinquency trends seen industrywide, making this a tough quarter. Expected Credit Loss (ECL) provisioning for this quarter is higher, thus impacting our overall profitability.”

 

Its net interest income (NII) increased by 30.46 per cent year-on-year (Y-o-Y) basis to Rs 397.29 crore in Q2FY25 from Rs 304.54 crore in Q2FY24. Sequentially, NII inched up from Rs 396.55 crore. The net interest margin (NIM) increased to 11.48 per cent from 11.12 per cent in Q2. However, NIM declined from 11.64 per cent in Q1FY25, the MFI said in a statement.

 

Its impairment for financial instruments, that is credit costs, shot up to Rs 694.05 crore in Q2Fy25 from Rs 76.2 crore in Q2FY24 and Rs 348.47 crore in Q1FY25.

 

The asset quality profile deteriorated with gross non-performing assets (GNPAs) rising to 9.4 per cent at end of September 2024 from 2.68 per cent a year ago and 5.46 per cent at end of June 2024.

 

Its assets under management (AUM) grew by 15.41 per cent Y-o-Y to Rs 11,571 crore. However, they shrank by 5.1 per cent from Rs 12,192 crore in June 2024.

 

“We have been closely tracking the evolving credit behaviour of the borrowers. We have implemented strong measures to tighten credit criteria for new disbursements along with an increased focus on field collections and curtailed growth resulting in muted AUM numbers Q-o-Q basis,” he said.

 

The company said it continues to have a strong balance sheet with a healthy capital adequacy ratio of 24.39 per cent. It has robust liquidity of Rs 1,793 crore of cash and cash equivalents, amounting to 15.62 per cent of the total assets.

 

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