Five-Star Business Finance Limited reported a robust second quarter for FY27, with net profit rising 10% sequentially to ₹299 crore. The company achieved a record disbursement of ₹2,078 crore, a 39% increase over the previous quarter. Assets Under Management (AUM) grew by 6.7% to ₹14,640 crore. The firm highlighted improved collections and stable asset quality, positioning it to comfortably exceed its annual growth guidance.
Strong Q2 FY27 Performance
Five-Star Business Finance Limited announced its financial results for the second quarter ended September 30, 2026, showcasing a period of significant growth and improved operational metrics. The company’s profit after tax (PAT) for the quarter stood at ₹299 crore, marking a substantial 10% increase sequentially and a 5% rise year-on-year. This performance includes a one-time tax benefit of ₹19 crore related to prior years; even excluding this, PAT grew by 3% sequentially.
Record Disbursements and AUM Growth
A key highlight of the quarter was the record-breaking disbursement volume of ₹2,078 crore, representing a 39% growth over the previous quarter and a 74% increase year-on-year. The company’s Assets Under Management (AUM) also saw robust expansion, growing by 6.7% quarter-on-quarter and 14% year-on-year to reach ₹14,640 crore as of September 30, 2026.
Improved Asset Quality and Collections
The company emphasized that this growth has been achieved while maintaining improving collections and stable asset quality. Customer collection efficiency improved to 98.2% from 97.7% in Q1. Consequently, the proportion of AUM in the current bucket rose to 84.78%, with 30-plus DPD decreasing to 11.5% from 12.38% in the prior quarter. Slippages eased to 0.68%, and Gross Stage-3 assets remained stable at 3.48%.
Cost of Funds and NIM
Five-Star Business Finance availed incremental debt of ₹825 crore at an all-inclusive cost of 8.43%. The cost of funds on the book marginally eased to 8.78% from 8.80% in Q1. Net interest margin remained stable at 19.87%, showing resilience despite industry headwinds. The company anticipates a slight increase in cost of funds due to the tightening rate cycle but expects to offset this through yield increases on incremental disbursements.
Profitability and Return Ratios
Profitability metrics also showed improvement. Return on Assets (ROA) increased by 28 bps to 8.39%, and Return on Equity (ROE) improved by 79 bps to 15.25%. For the first half of the fiscal year, PAT reached ₹571 crore, up 3% year-on-year. The company expressed confidence in its trajectory, expecting to comfortably exceed its growth guidance for the year.
Source: BSE
