Five-Star Business Finance Limited has informed the Exchange about Transcript
FIVESTAR · price
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Awaiting price reaction for this filing.
Five-Star Business Finance reported a muted Q1 FY26 due to overleverage stress among small-ticket borrowers (below INR 3 lakh) and the impact of the Karnataka ordinance. AUM grew 20% YoY but only 5% QoQ to ~INR 12,500 crores, with PAT at INR 266 crores (up 6% YoY, down 5% QoQ) and credit cost rising sharply from 0.7% to 1.3%. Management maintained FY26 guidance of 25% AUM growth, 12-15% profit growth, and full-year credit cost of 1.20-1.25%, while incremental cost of funds fell to 8.59% (down 70 bps). CEO Rangarajan Krishnan announced his resignation effective August 14, with CMD Lakshmipathy Deenadayalan assuming full operational charge. July collections have shown improvement, ~200 collection officers were added (now ~2,000), and rating outlook was upgraded to positive by both India Ratings and CARE.
Stock may face near-term pressure from elevated credit costs, the CEO exit, and management's guidance of 60-75 bps annual yield compression signaling NIM pressure, though the maintained FY26 growth and profit guidance, lower borrowing costs, and improving July collections provide some cushion.