Fusion Micro Finance Q4 Results Review - Decent, Strong Earnings Outlook; Maintaining A Buy: Anand Rathi

Anand Rathi Report

With better asset quality and strong profitability, Fusion Micro Finance Ltd.’s Q4 was stable. Key positives were-

1. asset quality (gross non-performing asset down 15 basis points QoQ),

2. net interest margin up 5 bps QoQ and

3. strong profitability (4.7% return on asset).

Robust growth and stable collections are expected in H2 FY25. We have a positive outlook on MFIs and look favorably at Fusion.

We introduce FY26e and maintain a Buy, at a lower 12-mth target price of Rs 683, 1.7 times price/book value on the FY26E book.

Risks:

Less-than-expected AUM book growth; higher slippages from the MFI book.

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