Five-Star Business Finance Posts Modest Profit Growth Amid Asset Quality Pressures, Cites Improving Collections

The latest announcement is out from Five-Star Business Finance Limited ( (IN:FIVESTAR) ).

Five-Star Business Finance reported a 16% year-on-year increase in assets under management to ₹12,964 crore as of the quarter ended 31 December 2025, though disbursements grew only 4% in the quarter and declined 18% sequentially. Profit after tax for the quarter rose marginally by 1% year-on-year to ₹277 crore, while key profitability metrics softened, with net interest margin edging down to 16.04%, return on assets slipping to 7.00% and return on equity to 15.80%; asset quality also weakened as gross and net Stage 3 assets increased to 3.18% and 1.94% respectively. For the nine-month period, PAT grew 5% year-on-year to ₹830 crore despite flat to lower disbursements, indicating earnings resilience but also pressure on growth and asset quality. Management highlighted that tighter underwriting and stronger collection efforts are starting to stabilize portfolio quality, with a marginal improvement in the proportion of current portfolio and consistently high collection efficiencies, suggesting early signs that recent risk-control actions may support asset quality and operational stability going forward.

More about Five-Star Business Finance Limited

Five-Star Business Finance Limited is a non-banking financial company based in Chennai that focuses on small-ticket secured lending, primarily serving micro-entrepreneurs and small businesses in underbanked segments across India. The company’s business model is centered on high-yield loans with strong emphasis on underwriting discipline and collection efficiency to manage credit risk in its granular loan portfolio.

Average Trading Volume: 171,811

Technical Sentiment Signal: Sell

Current Market Cap: 151.4B INR

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