Stock Under ₹200 to Buy Now for 28% Upside Potential

Synopsis: Motilal Oswal has maintained a “Buy” rating on Fusion Finance Limited, citing strong loan growth, improving collections, stable asset quality, and better earnings visibility, with a target price of Rs. 230.

This Small-Cap NBFC Stock, engaged in providing microfinance services, offering small loans and financial support to underserved rural and urban customers across India, is in focus after Motilal Oswal gave a Buy target of Rs. 230, which has an upside potential of 28.78 percent.

With a market capitalization of Rs. 2,887.68 crore, the shares of Fusion Finance Limited were currently trading at Rs. 178.60 per equity share, down nearly 1.49 percent from its previous day’s close price of Rs. 181.30.

What is the News?

Motilal Oswal, a prominent brokerage firm, has recommended a “Buy” call on Fusion Finance Limited with a target price of Rs. 230 per share, indicating an upside potential of 28.78 percent from its current price of Rs. 178.60 per share. 

Motilal Oswal remains positive on Fusion Finance and has maintained its “Buy” rating after the company reported a decent Q4FY26 performance. The brokerage highlighted steady improvement in collection efficiency, stable asset quality, and lower delinquencies, which indicate strengthening business fundamentals. Strong disbursement growth of nearly 85 percent YoY also reflected healthy demand for loans despite a moderation in the borrower base.

The brokerage believes improving operational trends will support faster earnings growth from the second half of FY27. Better collection efficiency and stable credit costs are expected to improve profitability over the coming years. Fusion Finance is also likely to benefit from continued expansion in its lending portfolio.

Motilal Oswal expects around 25 percent AUM CAGR during FY26E-28E, along with improvement in RoA and RoE by FY28E. With improving earnings visibility, healthy growth momentum, and strong asset quality, the brokerage sees further upside potential in the stock and continues to remain constructive on the company’s long-term outlook.

Assets Under Management (AUM):

Fusion Finance Limited’s Assets Under Management (AUM) have shown a mixed trend in recent periods. On a quarter-on-quarter (QoQ) basis, the company’s AUM declined from 8,980 crore in Q4 FY25 to 7,407 crore in Q4 FY26, showing a gradual slowdown over the quarters. 

Similarly, on a year-on-year (YoY) basis, AUM peaked at 11,476 crore in FY24 and then reduced to 8,980 crore in FY25 and further to 7,407 crore in FY26. This indicates that the company has been facing pressure in expanding its loan portfolio and managing growth. 

Branch Network:

Fusion Finance Limited’s network distribution has expanded strongly over the years, showing the company’s growing reach across India. The number of branches increased steadily from 725 in FY21 to 1,536 in FY26, reflecting continuous expansion in its operations and customer access. At the same time, the company also expanded its presence from 18 states in FY21 to 22 states by FY23, which has remained stable till FY26. 

Company Overview:

Fusion Finance Limited was founded in 2010 and is an Indian non-banking financial company (NBFC) specializing in microfinance and small business lending. Headquartered in Gurugram, Haryana, it operates primarily to provide financial inclusion services to underserved populations, particularly women in rural and semi-urban regions across India.

Recent Quarter Results:

Coming into financial highlights, Fusion Finance Limited’s revenue has decreased from Rs. 466 crore in Q4 FY25 to Rs. 424 crore in Q4 FY26, which is a drop of 9.01 percent. The net profit has shifted from negative to positive, from a net loss of Rs. 165 crore in Q4 FY25 to a net profit of  Rs. 115 crore in Q4 FY26.

Fusion Finance Limited’s revenue has grown at a CAGR of 14.69 percent over the last five years. In terms of return ratios, the company’s ROCE and ROE stand at 5.92 percent and 0.68 percent, respectively. Fusion Finance Limited has an earnings per share (EPS) of Rs. 0.86, and its debt-to-equity ratio is 2.27x.

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