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

• Market Cap: ₹111.10B
• Dividend Yield: 0.36%
• Average Volume (3M): 56.59K
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.70
• 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: 294,566,160
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 37.78
• Revenue Forecast (FY): ₹25.13B

• Rating: 59 Neutral
• Price Target: ₹371.00 ▼(-30.30% Downside)
• Action: Reiterated Date: 01/30/26
• Date: Action: Reiterated 01/30/26

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

Secured lending to underserved borrowers

Five-Star's focus on secured retail and small-business credit to underserved, self-employed borrowers builds a durable lending franchise. Collateral-backed loans lower loss severity, support recoveries and underwriting resilience, and align with structural demand among micro and small enterprises.

Consistent revenue growth and strong gross margin

Reported revenue growth (~16.7% over recent periods) and sustained gross profit margins indicate expanding loan origination and pricing power. Over the medium term this supports interest income stability and the ability to absorb modest funding cost increases while funding portfolio expansion.

Growing shareholder equity and reasonable equity ratio

A rising equity base and reasonable equity ratio provide a capital buffer that sustains lending capacity and regulatory resilience. This stronger capital position supports growth, helps absorb credit shocks, and lowers the probability of emergency capital raises in stressed environments.

Negative Factors

High leverage / elevated debt-to-equity

Material leverage increases sensitivity to funding costs and refinancing risk for an NBFC. High debt-to-equity amplifies earnings volatility, constrains strategic flexibility, and raises vulnerability to interest rate moves or tighter wholesale funding, affecting long-term stability.

Persistently negative operating cash flow

Sustained negative operating and free cash flow implies reliance on external financing to fund growth and obligations. Over months this can strain liquidity, increase funding costs, and force more expensive borrowings or equity raises if credit conditions tighten, limiting durable capital allocation.

Slight EBIT decline / rising operating costs

A declining EBIT trend despite revenue growth suggests operating cost pressure or reduced operating leverage. If persistent, this can erode net profitability and ROA, limiting the firm's ability to convert top-line growth into lasting earnings and weakening reinvestment capacity.

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 primarily makes money by originating and servicing secured loans and earning a spread between (a) the interest income and fees it charges borrowers and (b) the cost of funds it pays to raise borrowing capital. Key revenue streams include: (1) Net interest income: interest earned on its loan portfolio minus interest paid on its borrowings; this is typically the largest driver of earnings for lending-focused NBFCs. (2) Fee and other income: may include processing/origination fees, documentation charges, late payment/penal charges, and other loan-related service fees; specific fee lines and their relative contribution are null without company-reported detail. (3) Recoveries and collateral-related proceeds: because lending is secured, collections supported by collateral enforcement can reduce credit losses and support profitability; quantitative impact is null. (4) Treasury/other income: any gains or income from investing surplus liquidity or managing funding/liability positions may contribute, but the extent is null. Significant factors that influence earnings include loan growth (more assets generating interest), net interest margin (pricing versus funding cost), credit costs (defaults and provisioning), operating efficiency (cost to acquire/serve customers), and access to diversified funding (e.g., bank borrowings, securitization, or market instruments); the presence and specifics of particular partnerships or funding arrangements are null unless explicitly disclosed in the data available to you.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	29.53B	27.06B	20.78B	14.70B	12.33B	10.14B
Gross Profit	19.45B	16.61B	12.70B	10.07B	6.96B	5.57B
EBITDA	16.66B	15.36B	11.72B	9.09B	6.39B	4.90B
Net Income	11.05B	10.72B	8.36B	6.03B	4.54B	3.59B
Balance Sheet
Total Assets	154.35B	144.21B	116.89B	87.03B	63.43B	57.94B
Cash, Cash Equivalents and Short-Term Investments	22.25B	21.55B	16.72B	15.81B	9.18B	12.69B
Total Debt	83.76B	79.22B	63.52B	42.77B	25.80B	34.25B
Total Liabilities	86.28B	81.16B	64.93B	43.63B	26.33B	34.75B
Stockholders Equity	68.07B	63.05B	51.96B	43.40B	37.10B	23.18B
Cash Flow
Free Cash Flow	-3.43B	-11.28B	-21.45B	-11.35B	-2.86B	-1.61B
Operating Cash Flow	-3.26B	-10.45B	-21.22B	-11.23B	-2.77B	-1.57B
Investing Cash Flow	-7.99M	-5.85B	2.10B	1.62B	-3.84B	1.02B
Financing Cash Flow	3.53B	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 405.34, above the 50-day MA of 453.45, and below the 200-day MA of 577.54, indicating a bearish trend. The MACD of -27.58 indicates Positive momentum. The RSI at 21.89 is Positive, neither overbought nor oversold. The STOCH value of 16.13 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	₹167.10B	14.60	―	0.26%	18.54%	67.80%
AADHARHFC	64 Neutral	₹207.87B	18.67	―	―	―	―
IIFL	64 Neutral	₹207.75B	13.98	―	―	8.01%	-20.87%
FIVESTAR	59 Neutral	₹111.10B	14.49	―	0.36%	20.44%	13.10%
CREDITACC	56 Neutral	₹189.78B	20.20	―	0.77%	0.75%	-90.03%
MANAPPURAM	49 Neutral	₹228.54B	27.09	―	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.