Fusion Finance shares up 9% today; can this NBFC recover after 4 quarters of losses? 

Shares of Fusion Finance Ltd climbed nearly 9 per cent in Wednesday's trade, as investors felt a balance sheet strengthening with capital infusion would bring financial stability and drive the NBFC's profitability going ahead. 

Fusion Finance reported lowest quarterly provisions in Q4FY25, its Stage-3  PCR was over 95 per cent and new PAR accretion stood at 0.60 per cent, which were encouraging, analysts said. But they largely hold mixed views on the NBFC's prospects following its fourth straight quarter of losses.

The stock rose 8.83 per cent to hit a high of Rs 187.20 on BSE. The stock is down 58 per cent in the past one year. 

Fusion Finance's Q4 loss came in at Rs 164.56 crore, which was below December quarter's loss of Rs 719.32 crore and against Rs 132.69 crore profit reported in the year-ago quarter. 

ICICI Securities upped its target price on the stock to Rs 255 from Rs 160 earlier. It feels that a subdued AUM growth in H1FY26, rising borrowing cost and sticky operating cost would keep PPoP for Fusion Finance muted
in the near-term but added that stressed asset formation has peaked out and credit cost’s improving trajectory shall continue ahead. 

JM Financial noted that Fusion Finance was able to raise Rs 400 crore out of partly paid rights issue of Rs 800 crore, resulting in easing of pressure in terms of liquidity. 

"Although current bucket flow rate has reduced to 0.57 per cent (vs 1.80 per cent in 3Q25), the company still has 18 per cent of its customers with more than 3 lenders exposure (5 per cent already in stage 3) and impact of Tamil Nadu ordinance does not provide clear picture in the whole MFI space. Thus, we remain watchful on asset quality of the company," JM Financial said. 

This brokerage has a 'Sell' rating on the stock Rs 130.  

"We will keenly monitor the asset quality trends unfolding in the sector as a trend reversal is on the horizon. The recent improvement in collections and flow rates suggests early signs of a positive turnaround. However, sustained performance over the next 3-4 months will be crucial to validate this recovery as a definitive shift," MOFSL said. 

With no other near-term catalysts, it suggested a 'Neutral' rating with a revised target of Rs 170," MOFSL said.