Five-Star Business Finance Limited (FIVESTAR) AI Stock Analysis

• Market Cap: ₹134.09B
• Dividend Yield: 0.36%
• Average Volume (3M): 56.59K
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.52
• Revenue Growth: 20.44%
• EPS Growth: 13.10%
• Country: IN
• Employees: 9,322
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 9.40
• Shares Outstanding: 294,544,300
• 10 Day Avg. Volume: 28,179
• 30 Day Avg. Volume: 56,591
• PEG Ratio: 0.69
• Price to Book (P/B): 3.25
• Price to Sales (P/S): 7.57
• P/FCF Ratio: -18.17
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹700.00
• Price Target Upside: 31.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: ₹463.00 ▼(-13.02% Downside)

The score is primarily weighed down by weak technicals (clear downtrend and negative momentum) and financial risk from high leverage and negative operating cash flow. These are partially offset by solid revenue/margin performance and a reasonable valuation multiple.

Positive Factors

Revenue Growth

Sustained mid-teens revenue growth signals durable demand for SME financing and successful client acquisition. Over 2–6 months this supports scale economies, expands interest-income base, and underpins future margin recovery if credit quality holds and origination pipelines remain active.

Strong Gross Margin

A robust gross profit margin indicates effective pricing and cost control in core lending and factoring activities. This structural margin cushion helps absorb credit losses, funds originations and investments, and supports sustainable profitability as the firm scales over the medium term.

Growing Equity Base

Rising stockholders' equity and a reasonable equity ratio provide a lasting capital buffer to support loan book growth and regulatory requirements. This strengthens resilience to credit shocks and reduces near-term dilution pressure, improving long-term funding flexibility.

Negative Factors

High Leverage

Elevated debt-to-equity increases structural financial risk by raising fixed interest obligations and sensitivity to funding shocks. Over coming months this can constrain balance-sheet flexibility, increase refinancing risk if market conditions tighten, and limit ability to absorb credit deterioration.

Negative Operating Cash Flow

Persistent negative operating and free cash flow implies reliance on external financing to fund lending and investments. Structurally, this heightens liquidity risk and cost-of-capital exposure, making the business vulnerable if access to financing tightens or funding costs rise over the medium term.

Declining EBIT

A declining EBIT margin suggests rising operating costs or margin pressure from competition. If this trend persists, it will erode the conversion of revenue into sustainable earnings, reducing internal cash generation and the firm's ability to invest or strengthen reserves over the next several quarters.

Five-Star Business Finance Limited Business Overview & Revenue Model

Company Description

Five-Star Business Finance Limited provides loans for business, home renovation/extension, and other mortgage purposes in India. The company was formerly known as Five Star Business Credits Limited and changed its name to Five-Star Business Finance Limited in July 2016. Five-Star Business Finance Limited was incorporated in 1984 and is based in Chennai, India.

How the Company Makes Money

FIVESTAR generates revenue primarily through interest income on loans provided to SMEs. The company assesses the creditworthiness of clients and sets interest rates accordingly, which contributes significantly to its earnings. Additionally, FIVESTAR earns fees from its financing services, including origination fees, processing fees, and late payment fees. Invoice factoring also serves as a key revenue stream, allowing the company to charge a percentage of the invoice value as a fee. Strategic partnerships with banks and financial institutions enhance FIVESTAR's service offerings and client reach, further boosting its revenue potential.

Five-Star Business Finance Limited Financial Statement Overview

Summary

Solid revenue growth and a strong gross margin support performance, but the slight EBIT decline, high leverage (elevated debt-to-equity), and persistently negative operating cash flow/free cash flow materially increase financial risk.

Income Statement

Five-Star Business Finance Limited has shown consistent revenue growth, with a notable increase in Total Revenue over the years. The Gross Profit Margin remains strong, indicating robust pricing power or cost management. However, there is a slight decline in EBIT, which might suggest rising operational costs or increased competition affecting profitability.

Balance Sheet

The company maintains a high Debt-to-Equity Ratio, reflecting significant leverage which can be risky in times of financial uncertainty. However, the consistent growth in Stockholders' Equity and a reasonable Equity Ratio indicate a strong capital base supporting its financial obligations.

Cash Flow

The company's cash flow from operations has been persistently negative, highlighting potential liquidity issues or aggressive growth strategies. Despite this, the company has managed to secure financing, reflected in positive financing cash flow. The negative Free Cash Flow indicates that the firm is investing heavily, possibly for future growth.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	28.32B	27.06B	20.78B	14.70B	12.33B	10.14B
Gross Profit	17.25B	16.61B	12.70B	10.07B	6.96B	5.57B
EBITDA	15.91B	15.36B	11.72B	9.09B	6.39B	4.90B
Net Income	10.87B	10.72B	8.36B	6.03B	4.54B	3.59B
Balance Sheet
Total Assets	0.00	144.21B	116.89B	87.03B	63.43B	57.94B
Cash, Cash Equivalents and Short-Term Investments	0.00	21.55B	16.72B	15.81B	9.18B	12.69B
Total Debt	0.00	79.22B	63.52B	42.77B	25.80B	34.25B
Total Liabilities	-63.05B	81.16B	64.93B	43.63B	26.33B	34.75B
Stockholders Equity	63.05B	63.05B	51.96B	43.40B	37.10B	23.18B
Cash Flow
Free Cash Flow	0.00	-11.28B	-21.45B	-11.35B	-2.86B	-1.61B
Operating Cash Flow	0.00	-10.45B	-21.22B	-11.23B	-2.77B	-1.57B
Investing Cash Flow	0.00	-5.85B	2.10B	1.62B	-3.84B	1.02B
Financing Cash Flow	0.00	15.93B	21.06B	16.88B	70.24M	10.33B

Five-Star Business Finance Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 532.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:FIVESTAR, the sentiment is Negative. The current price of 532.3 is above the 20-day moving average (MA) of 508.88, below the 50-day MA of 548.38, and below the 200-day MA of 621.71, indicating a bearish trend. The MACD of -20.06 indicates Positive momentum. The RSI at 25.01 is Positive, neither overbought nor oversold. The STOCH value of 15.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:FIVESTAR.

Five-Star Business Finance Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
PSB	65 Neutral	₹197.90B	16.14	―	0.26%	18.54%	67.80%
AADHARHFC	64 Neutral	₹212.82B	20.59	―	―	―	―
IIFL	64 Neutral	₹225.07B	17.55	―	―	8.01%	-20.87%
FIVESTAR	59 Neutral	₹134.09B	12.09	―	0.36%	20.44%	13.10%
CREDITACC	56 Neutral	₹212.06B	43.63	―	0.77%	0.75%	-90.03%
MANAPPURAM	49 Neutral	₹241.06B	59.06	―	0.80%	-3.68%	-80.12%

Five-Star Business Finance Limited Corporate Events

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

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.

Five-Star Business Finance Unveils Q3 FY2026 Unaudited Results Investor Presentation

Five-Star Business Finance Limited has released an investor presentation detailing its unaudited financial results for the quarter and nine months ended December 31, 2025, and filed the disclosure with both the National Stock Exchange of India and BSE. By making the presentation publicly available on its website, the company is providing investors and other stakeholders greater visibility into its recent financial performance and operational trajectory, a move that supports transparency and may influence market perceptions of its growth and position in the inclusive finance segment.

Five-Star Business Finance Schedules Investor Meeting with Wellington Asset Management

Five-Star Business Finance Limited has announced a scheduled meeting with investors and analysts, specifically with Wellington Asset Management on November 24, 2025. The meeting will be conducted physically, and discussions will be based on publicly available information, ensuring no unpublished price-sensitive information is disclosed. This initiative reflects the company’s commitment to transparency and engagement with its stakeholders, potentially enhancing its industry positioning and investor relations.

Five-Star Business Finance Schedules Investor Meetings for November 2025

Five-Star Business Finance Limited has announced a schedule of virtual meetings with investors and analysts, including Motilal Oswal Alternates and India First Life Insurance, on November 25, 2025. These meetings aim to discuss publicly available information about the company’s operations and strategies, ensuring transparency and engagement with stakeholders, while no unpublished price-sensitive information will be disclosed.