Fusion Finance shares a Buy after Q1 results? What CLSA, ICICI Sec, IIFL, MOFSL, JM say

Fusion Finance Ltd shares gained on Tuesday as analysts said June quarter marked a strong start to NBFC's earnings recovery, with improvement across margins, operating profitability and asset quality. Out of seven brokerages that revisited revisit their calls on the stock post Q1 results, six gave 'Buy' or 'Accumulate' rating, while one recommended 'Neutral' on the stock.

The targets on Fusion Finance stayed in the Rs 210-260 range. The lowest target at Rs 210 was from Haitong International while the highest one were by CLSA and MOFSL at Rs 260 level, Bloomberg data suggested

The turnaround comes on the heels of a management transition in March 2025, with Sanjay Garyali taking the helm, and a subsequent business model reset, said ICICI Securities. It said  Q1FY27 signalled that Fusion has moved beyond the stabilisation phase of FY26, with it now entering a more sustainable growth phase. Moreover, this reinforces Fusion’s turnaround thesis, with sharp asset quality improvement, operating leverage and expanding NIM driving a sustained earnings recovery. This brokerage suggested a target of Rs 240 on the stock.

"Overall, we expect earnings trajectory to improve, with growth acceleration, and improvement in asset quality. Consequently, we expect AUM CAGR of 27 per cent over FY26–28E and RoA of 3.3 per cent/4.05 per cent in FY27E/28E. We revise our EPS upwards by 23–26 per cent for FY27E/28E and revise our target to Rs 240 (from Rs 160 earlier), valuing the stock at 1.2x FY28E BVPS (from 0.9x P/B). We upgrade Fusion to BUY from ADD," JM Financial said.

MOFSL said Fusion Finance's stronger underwriting and collections supported credit cost moderation, while higher yields and improving growth momentum provided a favorable backdrop for sustained earnings growth.

"Overall, FY27 has started on a stronger footing, with the business positioned for a healthy growth trajectory and improving profitability ahead. The stock currently trades at 1 time FY28E P/B. We expect FUSION to deliver an AUM CAGR of 27 per cent over FY26E-28, with an RoA/RoE of 4.3 per cent/ 15 per cent by FY28E. Reiterate our BUY rating with a target of Rs 260 (based on 1.3x FY28E P/BV)," MOFSL said.

Among other brokerages, IIFL suggested a target of Rs 250 on Fusion Finance. DAM Capital suggested a target of Rs 235.  The stock setlled at Rs 210.85-odd level. The 12-month consensus target on the stock at Rs 229 implied 8.5 per cent upside on the counter, Bloomberg data compiled by Business Today suggested.