Fusion Finance shares may remain in focus after CLSA maintained its underperform rating on the stock with a target price of ₹155, implying downside from the current market price of ₹172.72.
In its latest note, CLSA highlighted that the company’s newly appointed CEO has indicated that full-year growth guidance will be clearer only after Q1 FY26. For now, management expects disbursements in the first quarter to mirror the trend seen in Q4 FY25.
The brokerage raised concerns over asset quality, pointing out that the net slippage rate has remained elevated at 13–14% annualised over the past two quarters—higher than peer CA Grameen’s 11%. Moreover, write-offs have been nearly three times that of CA Grameen.
Despite this, CLSA noted some comfort from Fusion’s strong provision coverage ratio (PCR) of 96.5% on its Stage 3 loan pool, which constitutes 7.9% of its AUM. It has modelled 7% AUM growth and 6% credit cost for FY26. The recently concluded rights issue also adds to the liquidity buffer and provides near-term stability.
Disclaimer: This article is for informational purposes only and is based solely on brokerage reports and publicly available data. It does not constitute investment advice or a recommendation to buy or sell any securities. Readers are advised to consult a certified financial advisor before making any investment decisions.