Fusion Finance Posts ₹13.85 Cr Net Profit in FY26, Reverses Prior Year Loss

Fusion Finance Limited (formerly known as Fusion Micro Finance Limited) held its Board of Directors meeting on May 15, 2026, wherein the board approved the Standalone Audited Financial Results for the quarter and financial year ended March 31, 2026. The audit was conducted by M/s. B.K. Khare & Co., Chartered Accountants, who issued an unmodified opinion on the financial results. The meeting commenced at 4:00 PM and concluded at 6:40 PM at Gurugram.

Financial Performance Overview

Fusion Finance reported a significant turnaround in profitability for the full financial year, posting a net profit after tax of ₹13.85 crore compared to a net loss of ₹1,224.54 crore in the previous year. For the quarter ended March 31, 2026, the company recorded a net profit of ₹114.19 crore against a net loss of ₹164.56 crore in the corresponding quarter of the prior year. The improvement was driven by a sharp reduction in impairment on financial instruments and lower finance costs. The following table presents the key financial highlights:

Metric: Q4 FY26 Q3 FY26 Q4 FY25 FY26 FY25 Total Revenue from Operations (₹ cr): 424.02 416.44 473.54 1,698.53 2,343.94 Total Income (₹ cr): 430.14 424.10 475.99 1,732.50 2,368.89 Finance Costs (₹ cr): 132.10 123.46 179.41 538.72 843.85 Impairment on Financial Instruments (₹ cr): 55.64 79.52 254.68 425.17 1,869.49 Employee Benefit Expense (₹ cr): 155.18 153.44 146.20 616.92 573.24 Total Expenses (₹ cr): 392.73 410.05 640.55 1,795.43 3,501.90 Profit/(Loss) Before Tax (₹ cr): 37.41 14.05 (164.56) (62.93) (1,133.01) Net Profit/(Loss) After Tax (₹ cr): 114.19 14.05 (164.56) 13.85 (1,224.54) Basic EPS (₹): 7.06 1.05 (14.97) 1.01 (111.41) Diluted EPS (₹): 7.06 1.05 (14.97) 1.01 (111.41)

Balance Sheet and Key Ratios

As at March 31, 2026, the company's total assets stood at ₹8,294.80 crore, marginally higher than ₹8,292.67 crore as at March 31, 2025. Total equity improved to ₹2,455.93 crore from ₹1,643.33 crore, supported by the Rights Issue proceeds. Cash and cash equivalents rose significantly to ₹1,874.84 crore from ₹783.05 crore. The company's asset quality showed improvement with Gross Stage III at 3.21% and a Provision Coverage Ratio of 84.44%.

Key Metric: March 31, 2026 March 31, 2025 Total Assets (₹ cr): 8,294.80 8,292.67 Total Equity (₹ cr): 2,455.93 1,643.33 Cash & Cash Equivalents (₹ cr): 1,874.84 783.05 Loans (₹ cr): 6,000.83 7,261.15 Borrowings (other than debt securities) (₹ cr): 5,210.60 6,203.24 Debt-Equity Ratio (Times): 2.27 — Gross Stage III (%): 3.21% — Net Stage III (%): 0.51% — Provision Coverage Ratio (%): 84.44% — CRAR (%): 36.46% — Liquidity Coverage Ratio (%): 335.09% — Net Profit Margin (%): 0.80% —

Cash Flow Highlights

For the year ended March 31, 2026, the company generated net cash flow from operating activities of ₹1,146.25 crore, compared to ₹1,447.88 crore in the prior year. Net cash flow from investing activities stood at ₹12.17 crore. Net cash used in financing activities was ₹66.63 crore, compared to ₹2,213.92 crore in the prior year. The net increase in cash and cash equivalents for the year was ₹1,091.79 crore, with closing cash and cash equivalents at ₹1,874.84 crore.

Cash Flow Item: FY26 (₹ cr) FY25 (₹ cr) Net Cash from Operating Activities: 1,146.25 1,447.88 Net Cash from Investing Activities: 12.17 74.40 Net Cash used in Financing Activities: (66.63) (2,213.92) Net Increase/(Decrease) in Cash & Equivalents: 1,091.79 (691.64) Closing Cash & Cash Equivalents: 1,874.84 783.05

Rights Issue and Capital Position

Pursuant to the Board approval dated December 04, 2024, the company completed a Rights Issue for an amount of ₹799.86 crore. The Rights Issue Committee approved the allotment of 6,10,58,392 equity shares at a price of ₹131 per equity share (including a premium of ₹121 per equity share). Of the total amount called up, the company received full consideration on 6,06,66,304 shares. The utilisation of Rights Issue proceeds is summarised below:

Parameter: Amount (₹ cr) Amount to be Utilised as per Offer Letter: 799.86 Utilisation up to March 31, 2026: 396.42 Unutilised Amount up to March 31, 2026: 403.44

The company also noted that borrowings amounting to ₹101.64 crore breached various financial covenants as on March 31, 2026, making them repayable on demand. Extensions have been obtained from lenders for borrowings aggregating ₹37.95 crore, and discussions are ongoing with remaining lenders. The company holds cash, cash equivalents, and liquid assets aggregating ₹1,913.03 crore as at March 31, 2026.

Loan Transfers During the Quarter

During the quarter ended March 31, 2026, the company transferred loans not in default through assignment under applicable RBI directions. The details are as follows:

Particulars: MFI Loans MSME Loans Number of Loans: 1,67,449 605 Aggregate Amount of Loans incl. Retention (₹ cr): 505.85 20.87 Sale Consideration excl. Retention (₹ cr): 455.26 18.78 Number of Transactions: 4 1 Weighted Average Maturity (months): 13.05 50.50 Weighted Average Holding Period (months): 10.29 22.98 Retention of Beneficial Economic Interest: 10.00% 10.00%

The company has not transferred any non-performing assets, acquired any loans through assignment, or acquired any stressed loans during the quarter.

New Labour Codes Impact

On November 21, 2025, the Government of India notified four Labour Codes consolidating twenty-nine existing labour laws into a unified framework. Based on its assessment, the company recognised an increase in gratuity liability due to past service cost of ₹4.78 crore and an increase in leave liability of ₹2.13 crore, both recognised under employee benefit expenses for the year ended March 31, 2026. The company continues to monitor the finalisation of Central and State Rules and will reflect any additional impact as appropriate.

Other Board Approvals

In addition to the financial results, the Board also approved the re-appointment of Mr. Sanjay Garyali as Managing Director & CEO, who retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment, subject to shareholder approval. Mr. Garyali has over 29 years of experience in the finance industry and was appointed CEO in March 2025, before being re-designated as Managing Director & CEO in September 2025.

The Board further approved the issuance and allotment of 10,00,000 equity shares to the Fusion Employees Benefit Trust under the Fusion Employee Stock Option Plan 2023 (ESOP 2023) on May 15, 2026. Post this allotment, the total issued share capital of the company stands at ₹1,62,88,62,330, comprising 16,30,82,277 equity shares. The allotted shares rank pari-passu with existing shares of the company. The exercise prices for the allotted shares ranged from ₹147.51 to ₹195.73 per share across various tranches.

Auditor's Declaration

Pursuant to Regulation 33(3)(d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. B.K. Khare & Co., Chartered Accountants (Firm Registration Number: 105102W), issued an Unmodified Audit Report on the Standalone Audited Financial Results for the financial year ended March 31, 2026. The auditors noted that the predecessor auditors, Deloitte Haskins & Sells, had issued a modified opinion for the comparative period ended March 31, 2025, relating to the evaluation of Expected Credit Loss allowances for prior periods. The current auditors' opinion is not modified in respect of these matters. The results are also available on the company's website at www.fusionfin.com .

Source: None/Company/INE139R01012/f48813fd-f105-4979-89f9-202bb1870135.pdf

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