Five-Star Business Finance Limited announced its financial results for the quarter and year ended March 31, 2026. Despite facing industry-wide asset quality challenges, the company achieved an AUM growth of 11% year-on-year to ₹13,225 crore. With operational improvements and a new collection vertical, the company maintains a positive outlook for the upcoming fiscal year, targeting an AUM growth of approximately 20% for FY27.
Financial Highlights for FY26
For the financial year ended March 31, 2026, the company reported a Profit After Tax (PAT) of ₹1,099 crore, marking a 2% growth over the previous year. The Assets Under Management (AUM) reached ₹13,225 crore, an 11% increase year-on-year. Despite a challenging macro environment impacting asset quality for small-ticket lenders, the company sustained a healthy Return on Equity (RoE) of 16.06% and a Return on Average AUM of 8.68%.
Q4 Performance and Operational Improvements
During the fourth quarter, the company recorded a PAT of ₹269 crore, with a disbursement volume of ₹1,213 crore, reflecting a 24% growth compared to the previous quarter. Management noted that aggressive collection strategies and the deployment of a new, full-fledged collection vertical have significantly stabilized key metrics. Notably, the unique customer collection efficiency reached 98.1%, the highest in the company’s history, while the slippage ratio improved from 1.09% in Q3FY26 to 0.70% in Q4FY26.
Strategic Growth and Outlook
The company successfully optimized its cost of funds, which dropped to 8.95% in the final quarter from 9.12% in the preceding quarter. A significant funding milestone was achieved through a $100 million investment from the Asian Development Bank, bolstering the firm’s ability to support lower-income women borrowers. With 844 branches now operational across 11 states/UTs, the company is well-positioned for its next phase of growth, targeting 20% AUM expansion in FY27 driven by robust credit underwriting and proactive risk management.
Source: BSE
