Financial Performance Metrics

Quarterly Results (Q2FY27 vs Q2FY26 vs Q1FY27)

  • Assets Under Management (AUM): ₹14,640 Cr (14% YoY growth, 7% QoQ growth)
  • Disbursements: ₹2,078 Cr (74% YoY growth, 39% QoQ growth)
  • Profit After Tax (PAT): ₹299 Cr (5% YoY growth, 10% QoQ growth)
  • Net Interest Margin: 19.87% (16 bps YoY increase, 10 bps QoQ decrease)
  • Return on Average AUM: 8.39% (59 bps YoY decrease, 28 bps QoQ increase)
  • Return on Equity: 15.25% (166 bps YoY decrease, 79 bps QoQ increase)
  • Gross Stage 3 Assets: 3.48% (84 bps YoY increase, 2 bps QoQ increase)
  • Net Stage 3 Assets: 2.14% (68 bps YoY increase, 4 bps QoQ increase)
  • Total Income: ₹875 Cr (8% YoY growth)
  • Profit Before Tax: ₹375 Cr (2% YoY decrease)

Half-Yearly Results (H1FY27 vs H1FY26)

  • Disbursements: ₹3,574 Cr (44% YoY growth)
  • PAT: ₹571 Cr (3% YoY growth)
  • Net Interest Margin: 19.91% (5 bps YoY increase)
  • Return on Average AUM: 8.25% (65 bps YoY decrease)
  • Return on Equity: 14.86% (188 bps YoY decrease)

Operational Highlights

Distribution Network

  • Total branches: 875 across 11 states/UT
  • New branches opened in Q2: 19
  • Active loans: 0.51 million

Asset Quality & Collections

  • Unique Customer Collection Efficiency: 98.2% (improved from 97.9% in Q1FY27)
  • X-bucket Collections: 99.4% (improved from 99.2% in Q1FY27)
  • 30+ DPD: 11.50% (improved from 12.38% in Q1FY27)
  • Current Bucket Proportion: 84.78% (improved from 83.30% in Q1FY27)
  • Slippage Ratio: 0.68% (improved from 0.70% in Q1FY27)
  • Credit Cost: 1.80% of average AUM (improved from 1.85% in Q1FY27)

Provisions

  • ECL Provision: ₹253 Cr (excluding inter-corporate deposits), representing 1.73% of overall AUM
  • Stage 3 Provision: ₹201 Cr
  • Provision Coverage Ratio on Stage 3 Assets: 39.49%

Borrowings & Liquidity

  • Total Borrowings: ₹7,968 Cr (including debt securities)
  • Liquidity: ₹1,287 Cr as of September 2026
  • Cost of Incremental Debt: 8.43% for ₹825 Cr raised during quarter
  • Cost of Funds: 8.78% (slight decrease from 8.80% in Q1FY27)

Management Commentary

Mr. Lakshmipathy Deenadayalan, Chairman & Managing Director, stated:

  • Company delivered historically best disbursements and strong performance across parameters
  • Growth achieved alongside improving collections, stable asset quality and profitability
  • Expect flattish credit slippages and credit cost for rest of year despite industry headwinds
  • Expect to exceed growth guidance for the year
  • Yield increases on incremental disbursements effective from October 2026 to cushion impact of rising cost of funds
  • Confident of offsetting RBI's hawkish stance through operating leverage, increased productivity, and cost control
  • PAT includes one-time tax benefit of ₹19 Cr pertaining to prior years

Business Overview

Five-Star Business Finance Limited is an NBFC-ND-SI registered with RBI, primarily offering small business loans collateralized by house property across 11 states with 875 branches.