A. Fragmentation is process of breaking down of parent individual into small pieces or fragments accidentally or through external force. Each piece or fragment develops into a new individual.
B. Binary fission is process of division of a parent cell into two daughter cells of equal size.
C. Budding is process in which parent cell produces one or more bud-like structure which detaches from parent cell and grows into a new individual.
D. Sexual reproduction involves fusion of gametes from two different parents.
Since given diagram is showing a bud-like structure, it represents process of budding. So, correct answer is option C.