Five-Star Business Finance Limited Reports Q4 FY26 and FY26 Results, Highlighting Operational Recovery
Five-Star Business Finance Limited announced its unaudited financial results for the quarter and year ending March 31, 2026. The company reported figures across key metrics including Assets Under Management (AUM), Profit After Tax (PAT), and various operational efficiencies for both the quarter and the full financial year.Quarterly and Annual Financial Performance
The company's performance metrics are outlined below for the quarter and year ended March 31, 2026, compared to the preceding periods.Results for the Quarter Ended March 31, 2026
| Particulars | Q4FY26 | Q4FY25 | Y-o-Y | Q3FY26 | Q-o-Q |
|---|---|---|---|---|---|
| AUM (Rs Cr) | 13,225 | 11,877 | 11% | 12,964 | 2% |
| Disbursements (Rs Cr) | 1,213 | 1,460 | -17% | 976 | 24% |
| Gross Stage 3 Assets | 3.37% | 1.79% | 1.58% | 3.18% | 0.19% |
| Net Stage 3 Assets | 2.00% | 0.88% | 1.12% | 1.94% | 0.06% |
| PAT (Rs Cr) | 269 | 279 | -4% | 277 | -3% |
| Net Interest Margin* | 20.07% | 20.72% | -0.65% | 19.57% | 0.50% |
| Return on Average AUM | 8.37% | 9.87% | -1.50% | 8.53% | -0.16% |
| Return on Equity | 15.09% | 18.36% | -3.27% | 15.80% | -0.71% |
Results for the Year Ended March 31, 2026
| Particulars | FY26 | FY25 | Y-o-Y |
|---|---|---|---|
| AUM (Rs Cr) | 13,225 | 11,877 | 11% |
| Disbursements (Rs Cr) | 4,676 | 4,970 | -6% |
| Gross Stage 3 Assets | 3.37% | 1.79% | 1.58% |
| Net Stage 3 Assets | 2.00% | 0.88% | 1.12% |
| PAT (Rs Cr) | 1,099 | 1,073 | 2% |
| Net Interest Margin* | 19.86% | 20.46% | -0.60% |
| Return on Average AUM | 8.68% | 9.96% | -1.28% |
| Return on Equity | 16.06% | 18.68% | -2.62% |
*Net Interest Margin is computed as a percentage of Average AUM.
Operational Highlights and Outlook
Commenting on the results, Mr. Lakshmipathy Deenadayalan, Chairman & Managing Director, stated that FY2025-26 faced significant challenges due to asset quality headwinds faced by Micro Finance Institutions (MFIs) and unsecured loan lenders. Since the company provides loans to small business owners and self-employed individuals, it saw increased Days Past Due (DPDs) and Non-Performing Assets (NPA) during the financial year.However, Mr. Deenadayalan noted that actions taken in recent quarters have stabilized the situation, enabling the company to move towards "Onwards and Upwards" growth.
For the quarter ended March 31, 2026, the collection efficiencies showed significant improvement:
- Unique customer collection efficiency (excluding NPA loans) stood at 98.1%, marking one of the best records for the company.
- X-bucket collections were 99.3%, which helped manage forward flows from the X-bucket.
- The slippage ratio dropped from 1.09% in Q3FY26 to 0.70% in Q4FY26.
- The proportion of the portfolio increased from 81.77% in Q3FY26 to 82.69% in Q4FY26.
During the current quarter, the company’s disbursement amount reached ₹1,213 Cr, representing a 24% increase over the previous quarter.
Funding and Growth Trajectory
The company continued its robust funding profile, availing incremental debt of ₹928 Cr during the quarter at an all-inclusive cost of 8.53%. The institution also received $100 Mn from Asian Development Bank. The cost of funds for the quarter decreased to 8.95% from 9.12% in Q3FY26, and for the full year, the cost of funds dropped from 9.64% in FY2024-25 to 9.21% in FY2025-26.While the company achieved AUM growth of 11% and PAT growth of 2% despite a challenging year, the management noted that the exit of a Senior Management Professional did not impact performance, demonstrating the depth of the team.
Looking ahead, the company stated it is well-positioned to achieve AUM growth of around 20% for FY27 and subsequent years, focusing on robust credit underwriting, strong collections, and proactive risk management.
Key Corporate Metrics
The company reported several structural details for the quarter:- AUM: As of March 31, 2026, AUM stood at Rs 13,225 Cr, reflecting 11% year-on-year growth.
- Branch Presence: The company has expanded its physical network to 844 branches across 11 states/UT, adding 9 new branches during the quarter.
- Total Borrowings: Total borrowings, including debt securities, were recorded at Rs 8,200 Cr as of March 2026.
- Liquidity: The company maintained a liquidity buffer of Rs 2,295 Cr as of March 2026.
FIVESTAR Stock Price Movement
On Tuesday, Five-Star Business Finance Limited shares slipped by 1.62% to settle at ₹500.45. The stock shed ₹8.30 during the session, with traders moving a total volume of 1.45 million shares.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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