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Earnings Call

Five-Star Business Finance Earnings Call: Key Takeaways

Management is navigating a 'behavioral' credit crisis in small-ticket loans. They are prioritizing collection stability and vertical building over disbursement growth, which has slowed significantly to fix asset quality issues.

Why this was an Alfa AlertNot a filter event. Performance was in line with cautious internal stability targets, not a 10%+ guidance beat.
Highlights
Revenue growthModerate growth; 9M PAT grew 5% YoY to ₹830cr.
MarginsYields down 20bps QoQ; stable spreads at 13.9%.
Management confidenceBalanced but cautious; focused on 'fixing' over-leveraging issues.

Growth

AUM growth moderated; disbursements fell 18% QoQ as credit filters tightened. PAT up 5% YoY to ₹830cr for 9M FY26.

Outlook

Aims to resume acceleration in 1-2 quarters once collection vertical is fully operational; ROA remains healthy at 7%.

Risks

Persistent stress in Stage 3 assets; behavioral contagion from MFI sector defaults impacting borrower repayment discipline.

Last quarter's promises, checked

Delivered

  • Guided 20% AUM growth for FY27 → delivered 20% target (BEAT)
  • Guided 1.7-1.75% credit cost for FY27 → delivered 1.88% Q4 (BEAT)
  • Guided ROA 8.25-8.5% → delivered 8.68% for FY26 (BEAT)

Partly delivered

  • Guided 60-75 new branches → delivered 90 branches (PARTIAL - Exceeded target but opex rose)

Missed

  • Guided 1.5-1.6% steady-state credit cost → delivered 1.88% Q4 (MISS)
  • Guided 25% structural growth → delivered 11% for FY26 (MISS)
Source

Earnings Call filed with NSE, NSE: FIVESTAR. Summary written with AI assistance from the document.

Read the document ↗

Five-Star Business Finance Ltd: key numbers

Share price
₹520.95
Market cap
₹15,378 Cr
Revenue (annual)
₹3,218 Cr
Net profit (annual)
₹1,099 Cr
P/E (TTM)
13.9×Sector 22.0×
Promoter holding
18.61%+0.00% QoQ
FII holding
43.97%Current quarter

Reference market data from a third-party provider, updated daily. Not a valuation or a recommendation.

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Employee Stock Options

Five-Star Business Finance Employee Stock Options

Five-Star Business Finance allotted 7,040 equity shares under its 2018 ESOP scheme. Paid-up capital rose to ₹29.52 Crore following the option exercise.