Fusion Micro Finance Q3 Review- Business Growth Strong; Punjab Portfolio Sees Higher Delinquencies: Systematix

Systematix Report

Fusion Micro Finance Ltd.'s reported mixed Q3 FY24 performance. While net interest margin improved by 44 basis points QoQ, credit cost spiked to 3.6% from 3.1%. Though business growth was strong (assets under management and disbursements up 24% YoY), asset quality deteriorated mainly due to higher delinquencies in Punjab portfolio.

Net Interest Income came in at Rs 3.4 billion registering a growth of 34% YoY, 11% QoQ and was in-line with consensus estimates aided by strong AUM growth and net interest margin expansion. Operating profit at Rs 2.6 billion, largely in-line with consensus estimates and grew 42% YoY, 8% QoQ.

Credit cost during the quarter increased from 3.1% in Q2 to 3.6% (due to higher provision on Punjab portfolio), resulting in profit after tax at Rs 1.3 billion (versus consensus estimates of Rs 1.4 billion).

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