Fusion Micro Finance (Fusion Finance) shares dropped almost 5% after CLSA downgraded the stock from ‘Outperform’ to ‘Underperform’. The brokerage also slashed its target price to ₹260 from ₹550, citing concerns over rising credit costs and collection efficiency.
CLSA highlighted that Fusion Fin’s collection efficiency, which had already dipped by the end of Q1 FY25, has not shown any improvement over the past two months. Additionally, the company is currently facing multiple internal changes, including leadership transitions and process updates, adding to the uncertainty surrounding its performance.
While Fusion Fin plans to raise ₹5.5 billion in equity by the end of 2024, CLSA remains cautious due to the ongoing challenges. The rising credit costs are a key factor contributing to the downgrade.
As of 9:40 AM, the shares were trading 4.31% lower at ₹264.00 on the NSE.
