Fusion Finance has reported a significant reduction in its net loss for the July-September quarter, signaling a potential turnaround for the Non-Banking Financial Company - Microfinance Institution (NBFC-MFI). The company's CEO, Sanjay Garwali, has expressed optimism about achieving profitability in the third quarter.

Financial Performance

Fusion Finance has shown marked improvement in its financial performance:

The company has successfully narrowed its net loss by ₹70.00 crore, representing a 76% reduction quarter-over-quarter.

Strategic Plans

To capitalize on this positive momentum, Fusion Finance has outlined several strategic initiatives:

1. Rights Issue: The company plans to call the second tranche of ₹400.00 crore from its ₹800.00 crore rights issue.

2. Loan Disbursals: Fusion Finance aims to increase its monthly loan disbursals:

   Timeline	Monthly Loan Disbursal Target
   Current	₹450.00 crore
   From January	₹550.00-600.00 crore

This planned increase represents a potential growth of 22-33% in monthly loan disbursals.

Outlook

CEO Sanjay Garwali's target of achieving profitability in the third quarter, if realized, would mark a significant milestone for Fusion Finance. The company has been navigating through six consecutive quarters of losses, and a return to profitability could signal a robust recovery in its business model and operational efficiency.

The combination of reduced losses, plans for capital infusion through the rights issue, and projected increase in loan disbursals suggests that Fusion Finance is implementing a multi-pronged strategy to strengthen its financial position and drive growth.

As the microfinance sector continues to play a crucial role in financial inclusion, Fusion Finance's performance and strategies will be closely watched by industry observers and investors alike.

Fusion Finance Limited (formerly Fusion Micro Finance Limited) has announced its financial results for the quarter and half year ended September 30, 2025, showing signs of recovery with reduced losses and improved operational metrics.

Key Financial Highlights

• Reduced Net Loss: The company reported a net loss of INR 22.14 crore in Q2 FY26, significantly lower than the INR 92.25 crore loss in Q1 FY26.
• Revenue Decline: Total income stood at INR 432.69 crore in Q2 FY26, down from INR 445.57 crore in Q1 FY26.
• Improved Net Interest Margin: NIM increased to 10.85% in Q2 FY26 from 10.29% in Q1 FY26.
• Asset Quality Improvement: Gross NPA declined to 4.61% in Q2 FY26 from 5.43% in Q1 FY26.

Operational Performance

• Loan Disbursements: Total loan disbursements stood at INR 1,298 crore in Q2 FY26, marking a 37% increase quarter-on-quarter.
• Assets Under Management: AUM stood at INR 7,038 crore as of September 2025.
• Branch Network: The company operates 1,545 branches across 22 states and 3 Union Territories.
• Active Borrower Base: Approximately 25.8 lakh active borrowers as of September 2025.

Financial Metrics

Management Commentary

Mr. Sanjay Garyali, MD & CEO of Fusion Finance Limited, stated, "Our path to recovery continues, reflected in the sharp reduction in losses, growth in disbursements, and consistent improvement in collection efficiency, credit costs, and GNPA levels. These outcomes demonstrate the strength of our disciplined underwriting practices, tighter operational guardrails, and tech-led processes."

He added, "With overall collection efficiency now at 98.5% and that of the new book at 99.5%, we are building a stronger, more resilient portfolio. Going forward, we aim to grow responsibly across emerging rural and MSME markets."

Other Developments

• The company has made its onboarding process completely paperless, enhancing customer experience.
• Fusion Finance has received IRDAI approval to operate as a Corporate Insurance Agent, positioning it to offer comprehensive financial solutions beyond lending.
• The Board of Directors has approved the issuance of non-convertible debentures up to an aggregate amount of INR 1,000 crore on a private placement basis.
• Mr. Devesh Sachdev has resigned from his position as a director of the company, effective November 4, 2025.
• The Board approved making a first and final call on partly paid-up equity shares of Rs 65.50 per share with November 11, 2025 as the record date.

Liquidity and Capital Adequacy

• The company maintains a robust liquidity position with INR 892 crore in cash and cash equivalents and liquid assets, representing 12.58% of total assets.
• Capital adequacy remains healthy with a CRAR of 31.31%.

Fusion Finance continues to focus on sustainable growth while maintaining prudent risk management practices. The company's efforts in improving operational efficiency and asset quality are reflected in the reduced losses and improved financial metrics for the quarter.