Fusion Finance Limited

Financial Services — Credit Services · NSE

₹158.75−₹3.55 (−2.19%)

DalalBaazaar Score

51 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

The 60-second version of Fusion Finance Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Fusion Finance Limited, a non-banking financial company, provides micro finance and MSME lending services in India. The company offers income generation, top up, emergency, and cross sell loans; secured loans; and life insurance products.

IndustryCredit Services

SectorFinancial Services

Employees12,021

Annual revenue₹1,513 Cr

How does it make money?

Turns over ₹1,513 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 12,021 employees supports ₹12.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹12.6 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, STATE BANK OF INDIA, HDFC BANK LTD, ICICI BANK LTD.. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

Peer median ROE16.5%

What is the outlook?

8 analysts covering the stock expect revenue to grow about 27.7% and earnings to grow about 54.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+27.7%

Est. earnings growth+54.9%

Analysts8

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -5% while net margin moved -96% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-5%

Margin effect-96%

DalalBaazaar Score

51/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 1.6% a year
✗ Profit has declined at 67.0% a year

Quality vs. Valuation

Company Quality

52/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

44/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

15.5x

3Y Median

4.5x

40 monthly readings · mean 23.5x · range 3.0x–198.3x

Sector Median

17.0x

median of 4 sector peers

⚠️Current valuation is approximately 241% above its 3y median of 4.5x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟡Against its sector it is priced broadly in line with the peer median of 17.0x.

vs. its own history

Expensive

4.5x median over 40 months · +241%

vs. sector peers

Fair

17.0x median of 4 peers · -9%

vs. generic bands

Fair

15x–35x

EV/EBITDA

30.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well0

Nothing stands out as clearly improving on the years of data available.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 16.7% to 0.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 7.8% to -1.3% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -39.6x — little room if earnings dip.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 22.6 points, from 36.0% to 13.4%.
🟡Profit is decliningFinancial
Net profit is down 96% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 56% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 36.0% to 13.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 241% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 16.7% to 0.6%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 11%✓ 13.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Return on equity stays above 8%✗ 0.6%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Interest cover stays above 3x✗ -39.6x
How much operating profit can fall before interest stops being comfortably covered.
4Valuation vs its own median of 4.5x✗ 15.5x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹2,551 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.5x

Fair

Fairly valued against the generic band

P/B Ratio

1.05x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹10.27

Profitable

Profitable on a per-share basis

ROE

0.6%

Weak

Weak capital efficiency

ROCE

-1.3%

Weak

Low return on total capital employed

Debt/Equity

2.28x

High

High leverage

Revenue Growth (YoY)

128.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

101.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹1,128 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

5.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

23.2%

Good

Healthy core-business profitability

Net Margin

19.6%

Good

Strong bottom-line conversion

Current Ratio

1.56

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.05

Market-like

Moves roughly in line with the market

52W Range Position

21%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

171.5 / 187.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

23.3

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,590 Cr	₹2,087 Cr	₹2,129 Cr	₹1,513 Cr	-1.6%
EBITDA	₹573 Cr	₹828 Cr	₹562 Cr	₹203 Cr	-29.2%
EBITDA Margin	36.0%	39.7%	26.4%	13.4%	—
PAT (Net Profit)	₹387 Cr	₹505 Cr	-₹1,225 Cr	₹14 Cr	-67.0%
EPS	₹41.78	₹45.89	₹-111.41	₹1.01	-71.1%
ROE	16.7%	17.7%	-74.5%	0.6%	—
ROCE	7.8%	8.1%	-33.5%	-1.3%	—
Total Debt	₹6,778 Cr	₹8,616 Cr	₹6,402 Cr	₹5,571 Cr	-6.3%
Free Cash Flow	-₹1,671 Cr	-₹1,370 Cr	₹1,437 Cr	₹1,128 Cr	—

🟡 Revenue has been broadly flat over 3 years (-1.6% a year).

🔴 EBITDA has shrunk at 29.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 36.0% to 13.4% over 3 years (-22.6 pts).

🔴 PAT (Net Profit) has shrunk at 67.0% a year over 3 years.

🔴 EPS has shrunk at 71.1% a year over 3 years.

🔴 ROE has fallen from 16.7% to 0.6% over 3 years (-16.1 pts).

🔴 ROCE has fallen from 7.8% to -1.3% over 3 years (-9.1 pts).

🟢 Total Debt has shrunk at 6.3% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹1,671 Cr to ₹1,128 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8,295 Cr

Total Liabilities

₹5,839 Cr

Cash & Equivalents

₹1,875 Cr

Operating Cash Flow

₹1,146 Cr

Capex

-₹18 Cr

Shareholding (proxy)

Institutional Holding

15.8%

Insider Holding

53.3%

Analyst Consensus

Recommendations

5 Buy · 3 Hold · 0 Sell

Target Price (Mean)

₹226.25

+42.5% vs CMP

Target Range

₹185 – ₹260

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
STATE BANK OF INDIA	10.3x	15.2%
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%

Recent News

1 mixed5 general

Fusion Micro Finance Share Price

Upstox, 16 Oct

Fusion Finance (FUSION) Share/Stock Price Live, NSE

TechGraph, 09 Oct

Fusion Finance forfeits unpaid rights shares after final reminder

The Economic Times, 28 Jul

Fusion Finance Q1 Profit at ₹62 Cr vs ₹92 Cr Loss YoY

HDFC Sky, 11 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Fusion Finance Sets ₹10,000 Crore AUM Target and Forecasts 20-25% Growth by 2027

Sahi, 18 May

Fusion Finance Insiders Sell ₹136m Of Stock, Possibly Signalling Caution

Simply Wall Street, 22 Apr

Watch Items

This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Profitability · Valuation

WeakGrowth · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

3 of 4 tripwires tripped — Return on equity stays above 8%; Interest cover stays above 3x; Valuation vs its own median of 4.5x · see Key things to watch ↑