Five-Star Business Finance Ltd (FIVESTAR)
🎯 Key Takeaways
- Five-Star Business Finance Ltd is in a high-growth phase, characterized by record disbursements, expanding AUM, and improving operational efficiency, despite a flat one-year return. Management is targeting 20% AUM growth and ROE of 18-20% at 3x leverage, supported by stable credit costs and incremental borrowing cost compression.
- Revenue grew 1.5% QoQ to ₹829 in Q1FY27.
- ⚠️ Rising leverage potential due to newly approved borrowing and NCD issuance limits could increase financial volatility if not managed prudently.
- Market Cap
- ₹15,307
- P/E Ratio
- 13.8
- P/B Ratio
- 25.50
- ROE
- 183.9%
- ROCE
- 213.5%
- Debt/Equity
- 0.71
- Div Yield
- 0.39%
- Promoter
- 18.6%
📖 The Story
Five-Star Business Finance Ltd is in a high-growth phase, characterized by record disbursements, expanding AUM, and improving operational efficiency, despite a flat one-year return. Management is targeting 20% AUM growth and ROE of 18-20% at 3x leverage, supported by stable credit costs and incremental borrowing cost compression. The company maintains a strong capital efficiency profile with ROE exceeding 180% and ROCE above 200%, reflecting high returns on capital deployed. Its business model emphasizes scalable rural and semi-urban lending with disciplined risk parameters.
📰 What's Happening
In Q1 FY27, the company reported record disbursements of INR 1,496 crores (+23% QoQ, +16% YoY) and net profit of INR 271 crores, driven by strong collection efficiency (97.9%) and flat slippages at 0.70%. AUM grew to INR 13,722 crores (+4% QoQ), and the company added 12 branches, reaching 856 total. Management reaffirmed its 20% AUM growth target and guided credit cost to 1.7%-1.9%, with incremental borrowing costs expected to stabilize at 8.5% and compress by 10-15 bps. Quarterly disbursements are projected at INR 6,500-6,800 crores for the remainder of the year, with monthly volumes between INR 600-670 crores.
Source: Stock Announcements
📊 Quarterly Results (₹ Cr)
| Metric | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|
| Revenue | 799 | 815 | 817 | 829 |
| Operating Profit | 375 | 362 | 348 | 352 |
| OPM % | 46.9% | 44.4% | 42.6% | 42.5% |
| Net Profit | 286 | 277 | 269 | 271 |
| EPS | ₹9.72 | ₹9.41 | ₹9.14 | ₹9.19 |
Operating margins have remained stable above 42% over the last four quarters, with net profit growing from INR 286 crores in September 2025 to INR 271 crores in June 2026, despite a slight dip in EPS. Revenue trends show consistent growth, rising from INR 799 crores to INR 829 crores over the same period, indicating healthy top-line expansion. The slight moderation in net profit and EPS in the latest quarter appears attributable to higher operating expenses or provisions, though management attributes this to strategic investments in branch expansion and portfolio diversification. The underlying trend remains positive, with profitability and efficiency metrics holding firm amid scale-up.
🔮 Management Outlook & What's Next
Management has provided clear forward guidance, targeting 20% AUM growth for the fiscal year, with quarterly disbursements expected to stabilize at INR 6,500-6,800 crores. Credit cost is guided to 1.7%-1.9%, and incremental borrowing costs are expected to compress by 10-15 bps, supporting margin stability. Management emphasized maintaining ROE in the 18-20% range at 3x leverage, underscoring a focus on capital efficiency and sustainable growth. These targets are underpinned by strong collection metrics, stable slippages, and a disciplined underwriting framework.
Extracted from official company announcements. Not StockFin.ai's opinion.
🏦 Balance Sheet (₹ Cr)
| Item | Mar 2018 |
|---|---|
| Equity Capital | 19 |
| Reserves | 581 |
| Borrowings | 426 |
| Total Liabilities | 1,172 |
| Fixed Assets | 6 |
| Investments | 0 |
| Total Assets | 1,172 |
The company's balance sheet reflects a conservative yet strategically leveraged capital structure, with borrowings of INR 426 crores as of March 2018 supporting asset growth to INR 1,172 crores. The recent approval of borrowing and NCD issuance limits totaling INR 13,000 crores and INR 5,000 crores respectively provides flexibility for future funding. While leverage remains moderate relative to equity, the company is actively managing capital allocation to support expansion without compromising financial stability.
💰 Cash Flow Statement (₹ Cr)
| Item | Mar 2019 |
|---|---|
| Operating | -951 |
| Investing | +14 |
| Financing | +1,025 |
| Net Cash Flow | +88 |
👥 Shareholding Pattern
| Category | Q2FY26 | Q3FY26 | Q4FY26 | Q1FY27 |
|---|---|---|---|---|
| Promoters | 18.6% | 18.6% | 18.6% | 18.6% |
| FII | 55.8% | 52.9% | 48.5% | 44.0% |
| DII | 12.2% | 14.7% | 17.6% | 22.4% |
| Public | 9.5% | 9.0% | 10.2% | 9.8% |
| # Shareholders | 94,108 | 91,561 | 97,128 | 1,02,270 |
FII holdings have declined from 55.81% in Q2FY26 to 43.97% in Q1FY27, while DII participation has increased from 12.17% to 22.35% over the same period, indicating a shift in institutional investor behavior. Promoter holding remains stable at 18.61%. The rising number of shareholders (1,02,270 in Q1FY27) suggests growing retail interest. The increase in DII and retail participation may reflect improving market confidence, though the decline in FII exposure warrants monitoring for potential volatility.
⚖️ Peer Comparison — Finance
| Company | MCap (₹ Cr) | P/E | ROCE | ROE | D/E |
|---|---|---|---|---|---|
| BAJFINANCE | 6.13 L Cr | 30.2 | 10.4% | — | 3.82 |
| BAJAJFINSV | 2.80 L Cr | 27.5 | 11.4% | — | 5.50 |
| SHRIRAMFIN | 2.30 L Cr | 17.3 | 11.5% | — | 3.80 |
| ICICIAMC | 1.59 L Cr | 31.8 | 111.5% | — | 0.00 |
| JIOFIN | 1.45 L Cr | 68.4 | 2.3% | — | 0.17 |
| CHOLAFIN | 1.40 L Cr | 24.2 | 9.3% | — | 6.93 |
| TATACAP | 1.39 L Cr | 25.4 | 8.4% | — | 5.28 |
| BAJAJHLDNG | 1.21 L Cr | 13.6 | 12.4% | — | 0.00 |
| MUTHOOTFIN | 1.11 L Cr | 9.8 | 14.4% | — | 3.88 |
| PFC | 1.09 L Cr | 4.2 | 9.8% | — | 7.62 |
🔗 Peer Stock Analyses
⚠️ Risk Factors
1. Rising leverage potential due to newly approved borrowing and NCD issuance limits could increase financial volatility if not managed prudently. 2. Despite stable slippages, the company's growth trajectory in a competitive rural finance segment may pressure underwriting standards over time. 3. Dependence on quarterly disbursement targets means any slowdown in loan demand or macroeconomic headwinds could impact revenue momentum. 4. Institutional outflow (FII decline) may signal shifting sentiment or portfolio rebalancing, introducing short-term volatility.
📋 Recent Filings
- 🔴 Announcement2026-09-29Five-Star Business Finance Ltd announced its schedule of investor and analyst meetings for September 29, 2026, including a virtual session with Bowhea…
- Announcement2026-09-28Five-Star Business Finance Ltd announced the closure of its trading window from October 1, 2026, through 48 hours after submitting un-audited Q2 and H…
- 🔴 Announcement2026-09-23Five-Star Business Finance Ltd announced its schedule of investor and analyst meetings for September 23, 2026, conducted virtually via MS Capital, wit…
- 🔴 Announcement2026-09-22Five-Star Business Finance Ltd announced its schedule of investor and analyst meetings under SEBI LODR Regulation 30, with the first virtual meeting w…
- 🔴 Announcement2026-09-18Five-Star Business Finance Ltd announced its schedule of investor and analyst meetings on September 18, 2026, including a physical meeting with HDFC M…
- 🔴 Announcement2026-09-18Five-Star Business Finance Ltd announced its schedule of investor and analyst meetings under SEBI LODR Regulation 30, including a virtual meeting with…
- 🔴 Announcement2026-09-18Five-Star Business Finance Ltd announced its schedule of investor and analyst meetings on September 18, 2026, including a physical meeting with Pictet…
- 🔴 Announcement2026-09-18Five-Star Business Finance announced its schedule of investor and analyst meetings on September 23, 2026, including a virtual session with Ikigai Asse…
- 🔴 Announcement2026-09-18Five-Star Business Finance announced its upcoming investor and analyst meetings scheduled for September 22, 2026, both in-person and virtual, and conf…
- 🔴 Announcement2026-09-18Five-Star Business Finance announced its schedule of investor and analyst meetings for September 2026, including a virtual forum with Citi on Septembe…
🧠 Analyst's Read
Five-Star Business Finance is executing a disciplined growth strategy with strong operational efficiency and capital returns, supported by management's clear targets and improving credit metrics. Investors should monitor quarterly disbursement trends, FII movement, and leverage management as key near-term indicators. The company's ability to sustain ROE above 180% amid expansion will be critical to maintaining investor confidence.
Based on filing content and financial data. Not a recommendation.
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Data sourced from stock announcements. Analysis generated by StockFin.ai.
For informational purposes only — not investment advice. Updated 2026-09-29.
Editorial & Data Transparency Notice
This analysis was programmatically compiled using StockFin AI utilizing official regulatory disclosures from the BSE and NSE. Content is automatically synthesized and audited against public financial filings. StockFin.ai is an educational research platform and is NOT a SEBI-registered investment advisor or research analyst.
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