Five Star Business Finance Q1 net profit up 2% as disbursements hit record ₹1,496 crore

Non-banking financial company Five Star Business Finance Ltd on Saturday (July 25) reported a 2% year-on-year increase in net profit to ₹271.4 crore for the quarter ended June 30, 2026, compared with ₹266.3 crore in the year-ago period.

Net interest income (NII) rose 10.2% year-on-year to ₹636.1 crore from ₹577.4 crore. Total income stood at ₹839 crore, registering a 6% year-on-year growth, while profit before tax (PBT) increased 2% to ₹362 crore.

The company reported its highest quarterly disbursement at ₹1,496 crore during Q1 FY27, up 23% sequentially and 16% year-on-year from ₹1,290 crore in Q1 FY26.

ALSO READ | Five-Star Business Finance shares fall 18% in two sessions after AUM growth guidance cut

Assets under management (AUM) stood at ₹13,722 crore as of June 30, 2026, growing 10% year-on-year and 4% sequentially. The AUM was distributed across 0.50 million active loans.

Five Star Business Finance said unique customer collection efficiency, excluding non-performing assets (NPAs), stood at 97.9% during the quarter compared with 98.1% in Q4 FY26. X-bucket collections remained at 99.2% compared with 99.3% in the previous quarter.

The company’s current bucket AUM proportion increased to 83.30% in Q1 FY27 from 82.69% in Q4 FY26. The slippage ratio remained steady at 0.70%, while gross Stage 3 assets increased marginally to 3.46% from 3.37% in the previous quarter.

ALSO READ | Five Star Business Finance forecasts 30% loan growth for FY25

Credit cost improved to 1.85% of average AUM in Q1 FY27 from 1.88% in Q4 FY26. The company’s return on assets (RoAUM) stood at 8.11%, down 26 basis points sequentially and 69 basis points year-on-year. Return on equity (RoE) was at 14.46%, declining 63 basis points sequentially and 211 basis points year-on-year.

During the quarter, Five Star Business Finance increased its branch presence to 856 branches across 11 states and Union Territories, after opening 12 new branches.

The company availed incremental debt of ₹450 crore during the quarter at an all-inclusive cost of 8.33%. The cost of funds on the overall borrowing book declined to 8.80% in Q1 FY27 from 8.95% in Q4 FY26.

Total borrowings, including debt securities, stood at ₹7,866 crore as of June 2026, while liquidity position was at ₹1,847 crore.

ALSO READ |

Five Star Business approves ₹4,000-crore fundraise via NCDs on private placement basis

The company carried an expected credit loss (ECL) provision of ₹244 crore, excluding ECL maintained on inter-corporate deposits, equivalent to 1.78% of overall AUM. Stage 3 provision stood at ₹191 crore, resulting in a provision coverage ratio of 40.14% on Stage 3 assets.

Lakshmipathy Deenadayalan, Chairman & Managing Director, said, "Q1 FY27 represents a positive beginning to the new fiscal year for Five Star, underpinned by the strong traction in disbursement and stabilisation momentum established in Q4 FY26.

We clocked our historical best in disbursements with quarterly disbursements coming in at ₹1,496 crore, a growth of 23% over the previous quarter and 16% on a year-on-year basis. On the collections front, several of our underlying collection metrics have shown clear improvement, which gives us continued confidence that we are moving in the direction of "Onwards and Upwards."

On Friday (July 25), shares of Five-Star Business Finance Ltd ended at ₹536.00, up by ₹1.65, or 0.31%, on the BSE.

ALSO READ | Five Star Business Finance shares finish listing day at 3% premium over issue price after a muted debut