Transcript of the Earnings Conference Call for the quarter ended March 31, 2026
FIVESTAR · price
▲ positive · ▼ negative · ● neutral filings · teal = economic event · numbered = multiple that day (click to pick). Times IST.
Five-Star Business Finance reported a challenging FY26 with asset quality headwinds due to MFI overlap and over-leverage in the small ticket loan segment. However, Q4 showed significant recovery with collection efficiency at 98.1% (best in company history), x-bucket collections at 99.3%, and slippage ratio dropping sharply from 1.9% to 0.7%. NPA remained stable at 3.37%. Disbursements for Q4 were INR 1,213 crores (up 24% sequentially) with full-year disbursements at INR 4,675 crores, delivering 11% portfolio growth. The company raised $100 million from Asian Development Bank. PAT for Q4 stood at INR 269 crores with full-year PAT of INR 1,099 crores (up 2% YoY). ROA was 8.68% and ROE was 16%. Management separated business and collections teams from April 1st to improve focus. Management guided for FY27 credit cost of 1.7-1.75%, with steady-state of 1.5-1.6% over the next 2-3 years. AUM growth target for FY27 is 20%, with opex to AUM expected at 7-7.25%.
The company has emerged from a challenging year with improved asset quality metrics and is well-positioned for a recovery in FY27. The 20% AUM growth target and declining credit cost guidance signal better profitability ahead, though elevated credit costs compared to historical levels (previously 0.8-1%) reflect the new normal for this segment.