Five-Star Business Finance Ltd

Five-Star Business Finance Limited reported strong results for the quarter ended September 30, 2026, with disbursements reaching Rs. 2,078 crores, a 39% increase from the previous quarter and 74% year-on-year. AUM grew to Rs. 14,640 crores, up 6.7% quarter-on-quarter and 14% year-on-year. Collections improved, with customer collection efficiency at 98.2% and X-bucket collections at 99.4%, leading to a rise in the current bucket proportion of AUM to 84.78%. Slippages eased slightly to 0.68%, and credit cost improved to 1.80% of average AUM. Net interest margin remained stable at 19.87%, while PAT reached Rs. 299 crores, up 10% sequentially and 5% year-on-year. The company added 19 branches in the quarter and 75 over the past year, focusing on core geographies. Management emphasized improved asset quality, controlled slippages, and confidence in meeting growth guidance for the year. They also discussed strategies to manage rising interest rates, including yield increases on new disbursements and operating leverage. The company noted a shift toward larger ticket sizes, with 25% of loans below Rs. 3 lakhs, 50% between Rs. 3-5 lakhs, and 25% above Rs. 5 lakhs. Management addressed concerns about asset quality, noting that while some metrics remain flattish, improvements are expected in the coming quarters. They also highlighted recovery efforts from written-off loans and the impact of regulatory changes on fee income.

The document emphasizes strong performance metrics, improved collections, controlled slippages, and confidence in meeting growth targets, indicating a positive tone.