Five-Star Business Finance Ltd. (FIVESTAR) — Tipsheet

Five-Star lifts credit cost view, trims ROA target despite record lending

Tipsheet Editorial — Mon, 27 Jul 2026 11:23:27 GMT

Record ₹1,496 cr quarterly disbursements, but credit cost guidance raised to 1.9% and ROA target cut to 6.0%-6.5% as technical write-offs loom.

What’s new

Record quarterly disbursements of ₹1,496 cr, up 23% QoQ
Credit cost guidance raised to 1.9%, with technical write-offs of ₹225-250 cr
Steady-state ROA target cut to 6.0%-6.5% from 8.0%-8.25%

Why it matters

Five-Star is growing fast, but profitability expectations have narrowed. The ROA target was cut by a wide margin, signalling that higher credit costs are compressing returns. Lower opex guidance offers some relief, but credit quality remains the key variable.

What we’re watching

Whether the 500k active-customer milestone drives scale-driven margin improvement
Slippage trends; gross stage 3 already rose to 3.46% from 3.37%
Ability to keep opex within the new 5.75%-6.0% target

The full read

Five-Star Business Finance delivered record disbursements of ₹1,496 crore in Q1 FY27, up 23% sequentially. But the headline growth came with a sting: management raised the upper end of its credit cost guidance to 1.9% from 1.75%, flagging technical write-offs of ₹225-250 crore for the year. More striking, the steady-state ROA target was slashed to 6.0%-6.5% from 8.0%-8.25%. The logic is clear: growth is back, but the cost of that growth is higher than expected. On the plus side, opex guidance was trimmed to 5.75%-6.0% of assets, and collections remained steady in a seasonally weak quarter. The stock now faces a tension between record loan volumes and a visibly narrower profit outlook.

Primary source: BSE · NSE

Five-Star's record ₹1,496 cr disbursements power Q1 growth

Tipsheet Editorial — Sat, 25 Jul 2026 19:24:40 GMT

Net profit rises 2% YoY to ₹271 cr; AUM up 10%. GS3 edges to 3.46% but cost of funds drops. Management reiterates 20% AUM growth guidance.

What’s new

Disbursements hit a record ₹1,496 crore, up 23% sequentially.
Net profit rises 2% YoY to ₹271 crore; AUM grows 10% YoY to ₹13,722 crore.
Gross stage-3 edges up to 3.46% from 3.37%; cost of funds falls 15 bps to 8.80%.

Why it matters

The record disbursements signal a return to growth momentum after a soft patch. But asset quality is still inching up, and credit costs remain above historical levels. The next test is whether GS3 stabilises without crimping profitability.

What we’re watching

Whether disbursement momentum sustains through Q2 and Q3.
Gross stage-3 trajectory and slippage ratio, currently steady at 0.70%.
Any further reduction in cost of funds as the RBI cycle shifts.

The full read

Five-Star Business Finance delivered a record quarter for disbursements: ₹1,496 crore, up 23% sequentially and 16% year-on-year. Net profit rose a modest 2% to ₹271 crore, while AUM grew 10% to ₹13,722 crore. The headline growth is clean, but asset quality remains a watch item — gross stage-3 inched up to 3.46% from 3.37% in March. The offset: cost of funds dropped 15 bps to 8.80%, and management reiterated its full-year AUM growth guidance of 20%. This was a strong start to the fiscal year. What changes from here is whether the GS3 stabilises as the loan book ages, or whether elevated credit costs eat into the margin benefit from lower funding costs.

Primary source: BSE · NSE

Five-Star Business Finance Q1 profit up but asset quality slips

Tipsheet Editorial — Sat, 25 Jul 2026 19:19:15 GMT

Net profit at ₹271.4 cr on income of ₹838.7 cr; gross stage 3 rises to 3.46%, credit costs slightly above guidance.

What’s new

Q1 FY27 net profit of ₹271.4 crore on total income of ₹838.7 crore.
Gross stage 3 ratio rose to 3.46% from 3.37% sequentially.
Annualised credit costs of ~1.8% marginally above the guided range.

Why it matters

The uptick in stage 3 assets and credit costs breaching the guided band signal that asset quality normalization is underway. For a stock trading at 13.3x earnings, the open question is whether this is a one-quarter blip or the start of a trend.

What we’re watching

Whether credit costs revert to the guided range in Q2.
Loan growth pace: AUM grew only ~2% sequentially.
RBI's joint audit mandate: appointment of Suri & Co as joint statutory auditor.

The full read

Five-Star Business Finance opened FY27 with a net profit of ₹271.4 crore on total income of ₹838.7 crore. But the asset quality picture is less comforting: the gross stage 3 ratio edged up to 3.46% from 3.37% in March, and annualised credit costs came in at about 1.8% of assets under management, marginally above the company's own guided range. AUM grew only ~2% sequentially, suggesting growth is steady but not accelerating. The board also made several governance moves, including a new independent director, an extended compliance officer term, and a joint auditor proposal to meet RBI norms, but these are procedural. What matters is whether the credit-cost creep is a one-quarter blip or the start of a trend. If the full-year guidance holds, this quarter is just noise. If it doesn't, the margin story changes.

Primary source: BSE · NSE

Five-Star Q1 net profit flat, asset quality softens within band

Tipsheet Editorial — Sat, 25 Jul 2026 19:04:04 GMT

Net profit at ₹271.4 crore versus ₹266.3 crore last year; gross Stage 3 inches up to 3.46% from 3.37%. Board approves routine appointments.

What’s new

Q1 net profit ₹271.4 cr (₹266.3 cr YoY); total income ₹838.7 cr.
Gross Stage 3 rises to 3.46% (March: 3.37%), net Stage 3 at 2.10%.
Board fixes AGM date, appoints independent director, extends compliance officer, proposes joint auditor.

Why it matters

The results are routine with no surprise. The marginal uptick in Stage 3 is mild and remains within the guided credit cost band of 1.7-1.75%, so the filing is unlikely to spark analyst revisions or change the investment thesis.

What we’re watching

Whether Stage 3 continues to edge up in coming quarters.
Credit cost trajectory relative to the 1.7-1.75% guidance band.
Loan growth momentum in a stable rate environment.

The full read

Five-Star Business Finance's June quarter was quietly in line. Net profit of ₹271.4 crore was marginally higher year-on-year (₹266.3 crore), while total income came in at ₹838.7 crore. Asset quality softened a notch: gross Stage 3 loans climbed to 3.46% from 3.37% in March, and net Stage 3 to 2.10% from 2.00%. But both remain inside the management's guided credit cost band of 1.7-1.75%, so no alarm. The board business, including the AGM date, new independent director appointment, compliance officer extension, and proposed joint auditor, was standard. This is a routine periodic disclosure that changes nothing for the thesis.

Primary source: BSE · NSE