Sector Alpha

Track where the smart money flows in Indian equities

DashboardWeekly UpdateUploadPipelinePE CyclesBrainAbout

Data updated weekly. Not financial advice.

Sector Alpha
  1. Home
  2. /Momentum
  3. /Finance & Investments - Microfinance
  4. /Fusion Finance Ltd
MomentumDeep Value

Fusion Finance Ltd: Why Is It Outperforming Nifty 500?

Active
RS +15.3%Average

In Week of May 10, 2026, Fusion Finance Ltd (Finance & Investments - Microfinance) is outperforming Nifty 500 with +15.3% relative strength. Fundamentals: Average.

Fusion Finance Ltd Key Facts

Market Cap
₹3,501 Cr
PAT Growth YoY
+102%
Revenue Growth YoY
-12%
RS vs Nifty 500
+15.3%
PB: Early ExpansionRiding Wave

What's Happening

📊PB near cycle lows — valuation reset is underway
👔Promoter stake down 2.8% this quarter
🌐FII stake increased 1.1% this quarter
🏛️DII reducing — stake down 7.3%
🏦GNPA improving to 4.38% — asset quality getting better
💰Trading 67% above estimated fair value — significant premium

Earnings Acceleration Triggers

1. Return to profitability with improving asset quality
Q3 FY26HIGH
2. Disbursement growth acceleration
Q3 FY26MEDIUM
3. DTA recognition potential
Q4 FY26MEDIUM

Key Risks

1. High operating expenses limiting leverage
MEDIUM
2. DTA recognition timing uncertainty
MEDIUM

Key Numbers

PAT Growth YoY
+102%
Inflection Up
Revenue YoY
-12%
Stable
GNPA
4.38%
Improving
Price to Book
1.8
Current Price
₹217
Fundamental Score
43/100
Average
3Y PAT CAGR
+30%
Market Cap
3.5K Cr
Valuation
Significantly Overvalued

12-Week Performance

Weekly presence in the outperformers list. Green = beating Nifty 500 by 10%+ that week.

12 weeks agoThis week

Why Are Fusion Finance Ltd's Earnings Accelerating?

Based on Q3 FY26 earnings • Updated Feb 22, 2026

Return to profitability with improving asset quality

Expected: Q3 FY26HIGH confidence+₹14 Cr revenue

What: Third consecutive quarter of asset quality improvement leading to ₹14 cr PAT in Q3 FY26

Impact: +₹14 Cr revenue

“Q3 FY26 earnings call transcript: "Q3 represents an important inflection point for Fusion. The business has now entered a phase of controlled stabilization and disciplined execution. I am pleased to share that we have returned to profitability this quarter delivering a PAT of 14 crores."”

Disbursement growth acceleration

Expected: Q3 FY26MEDIUM confidence+₹300 Cr revenue

What: 23% sequential growth in disbursements to ₹1,594 cr driven by operational improvements

Impact: +₹300 Cr revenue

“Q3 FY26 earnings call transcript: "Q3 disbursements stood at 1594 cr up from 1298 cr in the previous quarter. This growth was driven by two focused initiatives. First, reducing operational friction for our front-end teams. And second, leveraging a pre-approved base of high-quality customers."”

DTA recognition potential

Expected: Q4 FY26MEDIUM confidence

What: Potential ₹2,400 cr capital boost from DTA recognition in Q4 FY26

“Q3 FY26 earnings call transcript: "Like I said, I don't. We should not see this as real growth because we did not cut down on branches. We did not cut down on people. And I'll just give you a number. We did 670 crores out of which about 35 crores is MSME. 630 crore is MFI."”

What Are the Key Risks for Fusion Finance Ltd?

Earnings deceleration risks from management commentary

High operating expenses limiting leverage

MEDIUM

Trigger: If disbursement growth slows while expenses remain high

Management view: We did not cut down on branches. We did not cut down on people. And I'll just give you a number. We did 670 crores out of which about 35 crores is MSME. 630 crore is MFI.

Monitor: Cost-to-income ratio

DTA recognition timing uncertainty

MEDIUM

Trigger: If profitability remains volatile

Management view: We have enough capital for growth without that DTA as well and when DTA comes there is a straight addition of about 2400 crore and as I said that is a just a matter of time

Monitor: DTA recognition timeline

What Is Fusion Finance Ltd's Management Saying?

Key quotes from recent conference calls

“Q3 represents an important inflection point for Fusion. The business has now entered a phase of controlled stabilization and disciplined execution. I am pleased to share that we have returned to profitability this quarter delivering a PAT of 14 crores. — Sanjay Garyali”
“The NIM for the quarter stood at 11.3%, supported by a favourable portfolio mix, improving asset quality and lower income reversals from Stage 3 assets. — Krishan Gopal”
“We have liquidity of 1800 crore sanctions in the hand of about 1825 crore. So the focus is on the business and the growth and we are getting good support from the lenders plus as I mentioned we have a good headroom. — Sanjay Garyali”
“We have taken a very aggressive provisioning, and this was because we had a very tough time last year. We did not want to change it during the year. — Sanjay Garyali”

What Is Fusion Finance Ltd's Management Guidance?

Forward-looking targets from management for FY26

Management Tone: CAUTIOUS

Key Milestones

• Maintain improving asset quality trend

• Execute on disbursement growth

• DTA recognition

How Fast Is Fusion Finance Ltd Growing?

Revenue, profit and margin growth rates

MetricYoY3Y CAGRTrend
Revenue-12%+26%Stable
PAT (Net Profit)+102%+30%Inflection Up

The above analysis is parsed from publicly available earnings call transcripts. This is educational research only — not investment advice. Last updated Feb 22, 2026.

Other Top Finance & Investments - Microfinance Stocks Beating Nifty 500

CreditAccess Grameen Ltd
Weak
+17.4%
Northern Arc Capital Ltd
Weak
+13.7%
Muthoot Microfin Ltd
Weak
+12.3%
Satin Creditcare Network Ltd
Weak • 12w streak
+34.4%
Spandana Sphoorty Financial Ltd
Weak
+16.6%
← Back to Finance & Investments - MicrofinanceDashboard

Frequently Asked Questions: Fusion Finance Ltd

Based on publicly available financial data. This is educational research, not investment advice.

What were Fusion Finance Ltd's latest quarterly results?

Fusion Finance Ltd's latest quarterly results (Dec 2025) show

  • PAT Growth YoY: +101.9% (turning around (inflection up))
  • Revenue Growth YoY: -12.2%
  • Net Interest Margin: 2.00%
  • Gross NPA: 4.38%

Is Fusion Finance Ltd's profit growing or declining?

Fusion Finance Ltd's profit is growing with an turning around (inflection up) trend.

  • PAT Growth YoY: +101.9% (latest quarter)
  • PAT Growth QoQ: +163.6% (sequential)
  • 3-Year PAT CAGR: +30.5%
  • Trend: Turning around (inflection up) — consistent growth pattern

What is Fusion Finance Ltd's revenue growth trend?

Fusion Finance Ltd's revenue growth trend is stable.

  • Revenue Growth YoY: -12.2%
  • Revenue Growth QoQ: +3.7% (sequential)
  • 3-Year Revenue CAGR: +26.3%

What is Fusion Finance Ltd's asset quality trend?

Fusion Finance Ltd's asset quality trend is improving.

  • Gross NPA: 4.38%
  • Net NPA: 0.63%
  • GNPA Change YoY: -8.2% bps

What is Fusion Finance Ltd's 3-year profit and revenue CAGR?

Fusion Finance Ltd's long-term compounding rates

  • 3-Year Profit CAGR: +30.5%
  • 3-Year Revenue CAGR: +26.3%

Is Fusion Finance Ltd's growth accelerating or decelerating?

Fusion Finance Ltd's earnings growth is turning around (inflection up) with positive momentum on a sequential basis.

  • YoY Acceleration: +7.2% bps
  • Sequential Acceleration: 0.0% bps
  • Margin Warning: Operating margins are under pressure

What is Fusion Finance Ltd's trailing twelve month (TTM) performance?

Fusion Finance Ltd's trailing twelve month (TTM) performance

  • TTM PAT: ₹-265 Cr
  • TTM PAT Growth: +71.4% YoY
  • TTM Revenue: ₹2,000 Cr
  • TTM Revenue Growth: -31.3% YoY

Is Fusion Finance Ltd overvalued or undervalued?

Fusion Finance Ltd appears significantly overvalued based on our fair value analysis.

  • Valuation Signal: Significantly Overvalued
  • Price-to-Book: 1.8x

What is Fusion Finance Ltd's price-to-book ratio?

Fusion Finance Ltd's price-to-book ratio is 1.8x.

  • Price-to-Book (P/B): 1.8x
  • Book Value per Share: ₹118
  • Current Price: ₹217

Is Fusion Finance Ltd a fundamentally strong company?

Fusion Finance Ltd is rated Average with a fundamental score of 42.5/100. This score is calculated from objective financial metrics

  • PAT Growth YoY: +101.9% (20% weight)
  • PAT Growth QoQ: +163.6% (15% weight)
  • Earnings trend: inflection_up (5% weight)

Is Fusion Finance Ltd debt free?

Fusion Finance Ltd has a debt-to-equity ratio of N/A.

  • Total Debt: ₹6,000 Cr

What is Fusion Finance Ltd's return on equity (ROE) and ROCE?

Fusion Finance Ltd's return ratios over recent years

  • FY2023: ROE 21.0%
  • FY2024: ROE 20.0%
  • FY2025: ROE -55.0%

Is Fusion Finance Ltd's cash flow positive?

Fusion Finance Ltd's operating cash flow is positive (FY2025).

  • Cash from Operations (CFO): ₹1,000 Cr
  • Free Cash Flow (FCF): ₹2,000 Cr

What is Fusion Finance Ltd's dividend yield?

Fusion Finance Ltd currently does not pay a significant dividend (yield 0.00%).

  • Dividend Yield: 0.00%
  • Current Price: ₹217

Who holds Fusion Finance Ltd shares — promoters, FII, DII?

Fusion Finance Ltd's shareholding pattern (Mar 2026)

  • Promoters: 54.2%
  • FII (Foreign): 4.8%
  • DII (Domestic): 14.4%
  • Public: 26.4%

Is promoter holding increasing or decreasing in Fusion Finance Ltd?

Fusion Finance Ltd's promoter holding has decreased recently.

  • Current Promoter Holding: 54.2% (Mar 2026)
  • Previous Quarter: 54.9% (Dec 2025)
  • Change: -0.74% (decreasing — worth monitoring)

How long has Fusion Finance Ltd been outperforming Nifty 500?

Fusion Finance Ltd has been outperforming Nifty 500 for 2 consecutive weeks, indicating early-stage outperformance.

Is Fusion Finance Ltd a new momentum entry or an established outperformer?

Fusion Finance Ltd is an established outperformer with 2 weeks of consecutive Nifty 500 outperformance.

What are the growth catalysts for Fusion Finance Ltd?

Fusion Finance Ltd has 3 key growth catalysts identified from recent earnings analysis

  • Return to profitability with improving asset quality — Third consecutive quarter of asset quality improvement leading to ₹14 cr PAT in Q3 FY26
  • Disbursement growth acceleration — 23% sequential growth in disbursements to ₹1,594 cr driven by operational improvements
  • DTA recognition potential — Potential ₹2,400 cr capital boost from DTA recognition in Q4 FY26

What are the key risks in Fusion Finance Ltd?

Fusion Finance Ltd has 2 key risks worth monitoring

  • [MEDIUM] High operating expenses limiting leverage — 69% cost-to-income ratio with maintained branch network during downturn
  • [MEDIUM] DTA recognition timing uncertainty — Delay in DTA recognition could constrain growth ambitions

What did Fusion Finance Ltd's management say in the latest earnings call?

In Q3 FY26, Fusion Finance Ltd's management highlighted

  • "Q3 represents an important inflection point for Fusion. The business has now entered a phase of controlled stabilization and disciplined execution. I ..."
  • "The NIM for the quarter stood at 11.3%, supported by a favourable portfolio mix, improving asset quality and lower income reversals from Stage 3 asset..."
  • "We have liquidity of 1800 crore sanctions in the hand of about 1825 crore. So the focus is on the business and the growth and we are getting good supp..."

What is Fusion Finance Ltd's management guidance for growth?

Fusion Finance Ltd's management has provided the following forward guidance for FY26

  • Management tone: cautious
  • Milestone: Maintain improving asset quality trend
  • Milestone: Execute on disbursement growth

Is Fusion Finance Ltd worth studying for long term investment?

Based on quantitative research signals, here is why Fusion Finance Ltd may be worth studying

  • Earnings growing at +101.9% YoY
  • Cash flow is positive — CFO ₹1,000 Cr

What is the investment thesis for Fusion Finance Ltd?

Fusion Finance Ltd investment thesis summary:

Research Signals (Bull Case)

  • Growth catalyst: Return to profitability with improving asset quality

Risk Factors (Bear Case)

  • Margins under pressure
  • Appears significantly overvalued
  • Key risk: High operating expenses limiting leverage

What is the future outlook for Fusion Finance Ltd?

Fusion Finance Ltd's forward outlook based on current data signals

  • Earnings Trend: turning around (inflection up)
  • Revenue Trend: stable
  • Valuation: Significantly Overvalued
  • Key Catalyst: Return to profitability with improving asset quality
  • Key Risk: High operating expenses limiting leverage

The above FAQs are generated from publicly available earnings data and conference call transcripts. This is educational research only. Sector Alpha is not SEBI registered and does not provide investment advice.