Five-Star Business Finance Q2 FY27 results: net profit up 4.6% to ₹299.32 crore, revenue up 7.4%

How did Five-Star Business Finance perform in Q2 FY27?

Five-Star Business Finance Limited reported standalone revenue of ₹858.48 crore for Q2 FY27, up 7.4% from ₹799.44 crore in Q2 FY26 and 3.6% from ₹828.98 crore in Q1 FY27. Total income was ₹875.03 crore, compared with ₹806.50 crore a year earlier and ₹838.74 crore in the previous quarter. The filing and investor presentation did not provide EBITDA or an EBITDA margin.

PAT was ₹299.32 crore, up ₹13.18 crore, or 4.6%, from Q2 FY26 and ₹27.91 crore, or 10.3%, from Q1 FY27. Basic EPS was ₹10.14, compared with ₹9.72 and ₹9.19, respectively. The PAT margin was 34.9%, down 0.9 percentage points year on year but up 2.2 percentage points from the previous quarter.

What changed in Five-Star Business Finance's costs and profit?

Total expenses rose 17.8% to ₹500.27 crore from ₹424.58 crore in Q2 FY26, as employee cost increased 42.1% by ₹60.46 crore to ₹204.08 crore and other expenses rose 33.2% by ₹13.55 crore to ₹54.38 crore. Depreciation increased ₹0.67 crore to ₹9.78 crore, while finance costs fell ₹12.29 crore, or 6.8%, to ₹167.69 crore. The filing does not state why these cost lines changed.

Other income increased ₹9.48 crore, or 134.1%, to ₹16.55 crore from ₹7.07 crore, and total income rose ₹68.53 crore, or 8.5%, to ₹875.03 crore. There was no exceptional item. Tax expense fell ₹20.34 crore, or 21.2%, to ₹75.44 crore from ₹95.78 crore, which the company said included a one-time tax benefit of ₹19 Cr pertaining to prior years. As a result, PAT rose 4.6% even as PBT fell 1.9% to ₹374.76 crore.

Against Q1 FY27, total expenses were ₹23.48 crore higher, led by an ₹8.99 crore increase in other expenses and a ₹15.20 crore increase in employee cost, partly offset by a ₹3.81 crore reduction in finance costs. Other income rose ₹6.79 crore and tax fell ₹15.10 crore. PBT increased 3.5% to ₹374.76 crore and PAT increased 10.3% to ₹299.32 crore.

How did the first half of FY27 go?

In the first half of FY27, standalone revenue was ₹1,687.47 crore, up ₹101.36 crore, or 6.4%, from ₹1,586.11 crore in H1 FY26. Total income rose 7.3% to ₹1,713.77 crore from ₹1,597.69 crore, while PBT was ₹736.71 crore compared with ₹736.87 crore.

PAT for H1 FY27 was ₹570.73 crore, up ₹18.28 crore, or 3.3%, from ₹552.45 crore in H1 FY26. Basic EPS increased 3.0% to ₹19.33 from ₹18.76. Disbursements for the half-year were ₹3,574 Cr, up 44% from the year-ago period, while AUM ended at ₹14,640 Cr, up 14%.

What do the balance sheet and cash flow show?

Total assets increased to ₹16,178.23 crore at 30 September 2026 from ₹15,789.74 crore at 31 March 2026. Total equity rose to ₹7,903.44 crore from ₹7,380.15 crore, while cash and cash equivalents fell to ₹1,032.34 crore from ₹1,617.90 crore. The balance-sheet data did not include a borrowing comparison; the investor presentation separately reported total borrowings including debt securities of ₹7,968 Cr at September 2026 and liquidity of ₹1,287 Cr.

H1 FY27 operating cash flow was negative ₹770.69 crore, compared with negative ₹326.30 crore in H1 FY26. Investing cash flow was positive ₹476.87 crore against negative ₹0.80 crore, while financing cash flow was negative ₹291.74 crore against positive ₹352.96 crore. Capital expenditure was ₹9.78 crore, lower than ₹16.74 crore a year earlier.

How has Five-Star Business Finance done over the last 8 quarters?

Revenue increased in each of the last eight quarters on a year-on-year basis, reaching ₹858.48 crore in Q2 FY27 from ₹727.38 crore in Q3 FY25. PAT was higher year on year in each of the last two quarters, at ₹299.32 crore in Q2 FY27 versus ₹286.14 crore in Q2 FY26. The latest quarter was the highest revenue and PAT quarter in the supplied series, while the trend data did not provide EBITDA margins.

What else did the company announce?

The Board approved the unaudited financial results for the quarter and half-year ended 30 September 2026. The joint statutory auditors, Deloitte Haskins & Sells and Suri & Co, submitted a limited review report with an unmodified opinion, free from qualifications. The Board also approved a security cover certificate for the company’s non-convertible debentures.

The Board appointed Shankar Subramanian as Chief Risk Officer and Senior Management Personnel for three years, effective 26 October 2026. Jayaraman S ceased to be Chief Risk Officer and Senior Management Personnel on the same date because of an internal movement within the company. The same-day filings did not announce a dividend or a fund raise.

What did Five-Star Business Finance's management say?

Management said record Q2 FY27 disbursements were ₹2,078 Cr, up 74% year on year, while AUM reached ₹14,640 Cr, up 14% year on year. Management expects to cross its FY27 AUM growth guidance “very comfortably”, although it committed to no number and said revised guidance was likely only after Q3. Collection efficiency was 98.2%, 30+ DPD was 11.5%, and credit cost was 1.80% of average AUM.

Management expects flattish credit slippages and credit cost for the rest of FY27. It guided to slippages around 0.70% for the next couple of quarters and credit cost of 1.80% of average AUM. The company also expects NPA resolutions, including write-offs, to cross Rs 100 crore in FY27, with no FY28-FY29 credit cost numbers provided until after Q3 or Q4.

The CFO said incremental borrowing cost would be 8.70%-8.75% in H2 FY27 and book cost of funds would rise by ~12-15 bps from ~8.78% to ~8.90% by FY27 exit. Management does not expect margin expansion because repo and MCLR repricing will compress spreads; a 1% customer yield increase from October 2026 is expected to provide a cushion as it builds over 24-36 months.

Management identified rainfall deficits in parts of Karnataka, Madhya Pradesh and Maharashtra, sticky GNPA and Stage-3 assets, slippages near 0.70%, and a growing write-off pool with an 18-24 month recovery cycle as risks. The CFO said no margin expansion was possible because the company was already seeing the effect of higher repo rates on external benchmark-linked and MCLR-linked borrowings.

How did Five-Star Business Finance shares react?

The filing appeared after market hours. Five-Star Business Finance was up 1.3% after five minutes, 2.9% after 15 minutes and 1.6% after 30 minutes. It closed 1.6% above its pre-results close on the reaction day, while the other NBFC stocks had a median move of 0.3%.

By the next day’s close, the stock was up 0.2% from its pre-results close, compared with the industry median of 0.8%. By the fifth session’s close, it was down 3.8% from the pre-results close, compared with a 1.7% median gain for the industry. Earlier result-day moves included 1.4% on 25 July 2026, negative 10.6% on 28 January 2026 and 13.2% on 29 October 2025.

How did other Non Banking Financial Company (NBFC) companies do?

Among 77 other NBFC companies compared for Q2 FY27, the median revenue growth was 21.6%. Five-Star Business Finance’s revenue growth was lower than the median: 23 peers grew more slowly than the company and 54 grew faster. Of the 85 peers for which profit was compared, 56 reported higher profit.