Fusion Micro Finance Q1 Results Review - Weak Quarter; No Respite In Sight: Motilal Oswal

Motilal Oswal Report

Fusion Micro Finance Ltd. reported a net loss of ~Rs 356 million in Q1 FY25 (versus profit of ~Rs 1.2 billion in Q1 FY24) because of elevated credit costs. Net interest income grew ~35% YoY to ~Rs 4 billion (8% beat), while pre-provision operating profit also grew ~26% YoY to ~Rs 3 billion (6% beat). 

The cost-income ratio stood at ~38% (previous quarter: ~37% and previous year: ~36%). Increase in opex was because of branch openings and increase in door step collections.

Net credit costs stood at ~Rs 3.5 billion (versus estimate ~Rs 1.2 billion). Annualized credit costs rose sharply to ~13% (previous year: ~3.6% and previous quarter: 4.8%).

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