Fusion Finance Limited — Q1 FY26 earnings call

Now, I cannot give you an exact forward looking statement that whether Q2 will be profitable or Q3 will be profitable. That is the reason why we have shared data with you transparently, Abhijit. I think if you just put this in a model, and we have shared the flow rates with you, you will yourself get the confidence from a direction that we are able to set up that profits could happen quicker than a lot of us expected.

Analyst sought a clear timeline for profitability, but management provided data for inference rather than a direct commitment, indicating uncertainty.

Asked by Abhijit Tibrewal

On the fee income we are looking at, give us some time, we will give you some good news on fee income in future that what are the opportunities we are looking at. We have already applied for a corporate agency license for insurance. We will come back to you and the progress is significant. We will come back to you in the next quarter on what the status is on that.

Analyst questioned regional credit risks and a potential new revenue stream; management indicated future updates on fee income, suggesting it's still in early stages.

Asked by Abhijit Tibrewal

If you look at the final guardrails that have actually come in April, it is prudent for any financial services company, not just microfinance, with a new set of guardrails, give some vintage before you start getting into, let us say, either New to Fusion or New to Credit or any customer which is little unknown to you. That is why the entire focus is initially on our existing customers and the guardrails that we have kept are not simple guardrails, they are very complex.

Analyst challenged the effectiveness of guardrails given write-offs and customer mix changes, prompting management to explain their cautious, phased approach to new customer segments.

Asked by Viral Shah

On the current bucket collection efficiency, let us say if you see the flow forward rates and your question is that because your new book is growing. The new book is currently at about 44%, so what kind of differentiation you are seeing between the old book and the new book and the weighted numbers, they should show. Now, if you see the previous number, when we closed the March quarter was at about 98.44, the average was 98.10, the end point was 98.44. Now, the same collection efficiency, if you look at in Q1 FY26 is 98.55, which means that it has gone up by about 11 bps.

Analyst probed the sustainability of collection improvements and the rationale behind maintaining high provisioning, receiving detailed figures on efficiency gains.

Asked by Rajiv Mehta

See, we cannot give exact guidance, but I am saying that is why we are sharing so much of information with you so that you can model it but like I said we are constantly pushing ourselves, we are cognizant of the fact that OPEX needs to come down. Wherever we are seeing processes which are obsolete and non-productive, we are cutting it without even thinking twice about it.

Analyst sought clarity on future operating expenses and efficiency gains from technology, with management emphasizing their focus on cost reduction and process optimization.

Asked by Pranav Gupta

On the marginal interest on borrowing, instead of that, let us look at the NIMs, because that is what is critical. I think so there will be three things, two of them positive on NIM and the third one is cost of borrowing on the NIMs. While Aman will elaborate, some of this higher cost of borrowing comes because of lower tenure funds that we have got.

Analyst expressed concern over rising marginal cost of funds and its potential impact on margins, leading to management's clarification on NIM outlook and OPEX management.

Asked by Bhavesh Kanani