Stock Report

Five-Star Business Finance Reports Q1 FY27 Net Profit of ₹271 Crore; AUM Up 10% YoY to ₹13,722 Crore

Posted On : 2026-07-25 20:57:48( TIMEZONE : IST )

Five-Star Business Finance Limited (BSE: 543663, NSE: FIVESTAR, CIN: L65991TN1984PLC010844), a leading Chennai-based non-banking finance company (NBFC) specializing in small business and mortgage loans, announced its unaudited financial results for the first quarter ended June 30, 2026.

The company delivered steady operational performance, crossing ₹13,700 Crore in AUM and achieving strong disbursal growth of 16% YoY.

Key Financial & Operational Highlights (Q1 FY27 vs Q1 FY26 & Q4 FY26)

Assets Under Management (AUM): Reached ₹13,722 Crore, recording a 10% YoY growth compared to ₹12,458 Crore in Q1 FY26 and 4% QoQ growth from ₹13,225 Crore in Q4 FY26.

Disbursements: Total loan disbursements rose 16% YoY and 23% QoQ to ₹1,496 Crore (compared to ₹1,290 Crore in Q1 FY26 and ₹1,213 Crore in Q4 FY26).

Total Income: Stood at ₹838.74 Crore (₹83,874.12 Lakhs), reflecting a 6.01% YoY increase over ₹791.19 Crore in Q1 FY26.

Net Profit (PAT): Came in at ₹271.41 Crore (₹27,140.86 Lakhs), up 1.91% YoY compared to ₹266.31 Crore in Q1 FY26.

Return Metrics: Return on Average AUM (RoAUM) stood at 8.11%, while Return on Equity (RoE) was recorded at 14.46%.

Earnings Per Share (EPS): Basic EPS for the quarter stood at ₹9.19 per share (face value ₹1 each), up from ₹9.04 in Q1 FY26.

Consolidated Income & Expense Summary

Financial Metric (₹ in Lakhs)             | Q1 FY27       | Q4 FY26       | Q1 FY26       | FY26 (Audited)
---------------------------------------------------------------------------------------------------------
Interest Income                           | 80,760.58     | 79,545.22     | 76,468.43     | 3,12,912.22
Fees and Commission Income                |  1,359.14     |  1,413.24     |    962.81     |    4,654.68
Net Gain on Fair Value Changes            |    778.37     |    736.08     |  1,236.53     |    4,245.45
Total Revenue from Operations             | 82,898.09     | 81,694.54     | 78,667.77     | 3,21,812.35
Other Income                              |    976.03     |    911.28     |    450.97     |    2,784.82
Total Income                              | 83,874.12     | 82,605.82     | 79,118.74     | 3,24,597.17
Finance Costs                             | 17,150.50     | 18,138.70     | 18,729.22     |   73,718.74
Impairment on Financial Instruments       |  6,181.66     |  6,040.01     |  4,778.40     |   21,631.72
Employee Benefits Expense                 | 18,887.50     | 17,047.51     | 15,607.41     |   62,988.77
Depreciation and Amortization             |    920.60     |  1,009.67     |    822.17     |    3,704.67
Other Expenses                            |  4,538.75     |  4,656.97     |  3,686.19     |   16,271.57
Total Expenses                            | 47,679.01     | 46,892.86     | 43,623.39     | 1,78,315.47
Profit Before Tax (PBT)                   | 36,195.11     | 35,712.96     | 35,495.35     | 1,46,281.70
Tax Expense                               |  9,054.25     |  8,786.18     |  8,864.19     |   36,407.17
Net Profit (PAT)                          | 27,140.86     | 26,926.78     | 26,631.16     | 1,09,874.53
Total Comprehensive Income                | 27,054.69     | 27,715.75     | 26,478.54     | 1,10,649.40
Basic EPS (₹)                             |      9.19     |      9.14     |      9.04     |       37.31
Diluted EPS (₹)                           |      9.18     |      9.16     |      9.02     |       37.25

Key Ratios, Asset Quality & Capital Position

Key Prudential & Asset Quality Metrics    | June 30, 2026 | March 31, 2026 | June 30, 2025
-----------------------------------------------------------------------------------------
Gross Stage 3 Assets Ratio (%)            | 3.46%         | 3.37%          | 2.46%
Net Stage 3 Assets Ratio (%)              | 2.10%         | 2.00%          | 1.25%
Provision Coverage Ratio (Stage 3)        | 40.14%        | -              | -
Capital to Risk Weighted Assets (CRAR)    | 51.25%        | 51.89%         | -
Liquidity Coverage Ratio (LCR)            | 296%          | 258%           | -
Debt-Equity Ratio                         | 1.03          | 1.11           | -
Net Worth (₹ in Lakhs)                    | 7,65,342.37   | 7,38,015.36    | -
Net Profit Margin (%)                     | 32.36%        | -              | 33.66%

Operational Profile & Network Expansion

Branch Network: Added 12 new branches during the quarter, taking total branch presence to 856 branches across 11 states / UTs.

Cost of Funds: Overall cost of funds reduced to 8.80% in Q1 FY27 from 8.95% in Q4 FY26. Cost of incremental debt for the quarter stood at 8.33%.

Liquidity & Borrowings: Total borrowings (including debt securities) stood at ₹7,866 Crore, with a strong cash/liquidity buffer of ₹1,847 Crore as of June 30, 2026.

Collection Efficiency: Unique customer collection efficiency for the quarter remained healthy at 97.9%.

Commenting on the results, Mr Lakshmipathy Deenadayalan, Chairman & Managing Director, said, Q1 FY27 represents a positive beginning to the new fiscal year for Five Star, underpinned by the strong traction in disbursement and stabilization momentum established in Q4 FY26. We clocked our historical best in disbursements with quarterly disbursements coming in at INR 1,496 Cr, a growth of 23% over the previous quarter and 16% on year-on-year basis. On the collections front, several of our underlying collection metrics have shown clear improvement, which gives us continued confidence that we are moving in the direction of "Onwards and Upwards".

Collections during the quarter remained robust despite this being the seasonally weakest quarter. Few underlying metrics have shown encouraging signs of stabilisation. I want to share a few metrics that bring out this trend:

1. For the quarter ended June 30, 2026, our unique customer collection efficiency (excluding NPAs) stayed strong at 97.9% (98.1% in Q4FY26), underscoring robustness in EMI collections.

2. X-bucket collections remained strong at 99.2% (99.3% in Q4FY26), reflecting sustained repayment discipline which has helped contain forward flows from x-bucket. This has led to our Current bucket AUM proportion move up from 82.69% in Q4FY26 to 83.30% in Q1FY27.

3. Our slippage ratio (defined as increase in NPAs + write offs as a % of the opening standard AUM) remained steady at 0.70% in Q1FY27, similar to Q4FY26. Our Gross Stage 3 assets marginally inched up to 3.46% from 3.37% in Q4FY26. However, with fresh slippages tapering off, we expect the headline NPA numbers to begin normalising over the next couple of quarters.

4. Credit cost improved to 1.85% of average AUM for Q1FY27 compared to 1.88% for Q4FY26. With our collection strategies in place, we shifted greater focus towards disbursements and portfolio growth during the quarter. Disbursements grew sharply to ₹1,496 Cr, up 23% sequentially and 16% year-on-year, our highest quarterly disbursement ever. This has translated into AUM growth accelerating to 4% sequentially, taking our AUM to ₹13,722 Cr, up 10% year-on-year. The data underscores Five Star's return to a robust growth path. As quarterly momentum builds in the periods ahead, we remain confident of delivering our full-year growth guidance very comfortably.

I am thankful to all our lenders who continued to support us even during uncertain liquidity conditions. During the quarter ended June 30, 2026, we availed incremental debt of ₹450 Cr at an all-inclusive cost of 8.33%. Our cost of funds on the book continued its downward trajectory, easing further to 8.80% in Q1FY27 from 8.95% in Q4FY26, a reduction of 15 bps sequentially despite uncertain liquidity conditions. This not only ensured that our spreads remained intact (despite drop in yields) but it also shows the strength of the franchise from the perspective of external stakeholders.

For the quarter, we achieved a PAT of ₹271 Cr, up 1% sequentially and 2% year-on-year, and our RoAUM and RoE for the quarter stood at 8.11% and 14.46% respectively. With one quarter of FY27 behind us, we remain on track towards achieving our AUM growth guidance of 20% for the full year. As is our philosophy, we will aim at achieving strong yet sustainable growth, quality and profitability through robust credit underwriting, strong collections, and proactive risk management, backed by the use of appropriate technology and AI and supported by a diversified and cost-effective funding profile.

The momentum we have built as we start FY27 gives me immense satisfaction and great confidence that we are well placed to scale new highs in the coming quarters.

Shares of Five-Star Business Finance Limited was last trading in BSE at Rs. 535.15 as compared to the previous close of Rs. 534.35. The total number of shares traded during the day was 1169672 in over 2635 trades.

The stock hit an intraday high of Rs. 537.45 and intraday low of 520.50. The net turnover during the day was Rs. 620181159.00.