Five-Star Business Finance reported a strong recovery in Q4 FY26, achieving a unique customer collection efficiency of 98.1%. Despite challenges throughout the year, the company clocked a full-year PAT of ₹1,099 crore and achieved a 11% portfolio growth. Management expressed confidence in the company’s resilience, targeting 20% AUM growth for FY27, backed by a strategic separation of business and collection verticals to optimize operational performance.
Financial Performance Overview
Five-Star Business Finance demonstrated strong operational resilience in Q4 FY26. The company reported a quarterly PAT of ₹269 crore, contributing to an annual PAT of ₹1,099 crore. Despite a difficult macroeconomic environment and sector-wide asset quality headwinds, the company successfully maintained a healthy return on equity of 16% for the full financial year.
Asset Quality and Collection Metrics
The company highlighted a significant improvement in asset quality during the quarter. The slippage ratio dropped sharply from 1.9% in Q3 to 0.7% in Q4. Furthermore, the company achieved its best-ever unique customer collection efficiency of 98.1%, with x-bucket collections reaching 99.3%. Management noted that the worst of the asset quality stress is now behind them.
Strategic Growth and Outlook
Looking ahead, the company is well-positioned for an AUM growth of around 20% in FY27. To support this trajectory, the company has successfully implemented an organizational restructuring by separating its business and collection verticals as of April 1, 2026. This strategic shift is designed to sharpen the focus on new business acquisition while ensuring robust collection and stabilization of existing portfolios.
Funding and Expansion
Five-Star continued to demonstrate strong access to capital, having raised $100 million from the Asian Development Bank (ADB) during the quarter. With a strong liquidity position, the company plans to continue its branch expansion strategy, intending to open 60 to 75 new branches in the current financial year. These efforts are focused on maintaining the company’s ‘sweet spot’ of lending to small business owners, specifically within the ₹3 lakh to ₹5 lakh ticket size range.
Source: BSE
