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Informist, Monday, Jul. 28, 2025

--Five-Star Business Apr-Jun net profit INR 2.66 bln

--Analysts saw Five-Star Business Apr-Jun net profit INR 2.75 bln

--Five-Star Business Apr-Jun net profit INR 2.66 bln vs INR 2.52 bln yr ago

--Five-Star Business Apr-Jun revenue INR 7.87 bln vs INR 6.66 bln year ago

--Five-Star Business: Rangarajan Krishnan resigns as Joint MD, CEO of co

By Muskan Lodhi

MUMBAI – Solid growth in interest income lifted Five-Star Business Finance Ltd.'s revenue by over 18% on year in the June quarter. However, the company's bottom line rose only 6% on year as its expenses rose 31%, driven almost equally by employee costs, finance cost, and impairment of investments. While the non-banking finance company's assets under management rose by a smart 20% on year, its disbursals fell 2% as the company focused on improving the quality of its asset portfolio.

The company said its asset quality had worsened because of the effect of overleveraged crisis on its secured portfolio in the trailing quarter, which has continued in the current quarter as well.

Five-Star Business reported a net profit of INR 2.67 billion for the June quarter, marginally lower than the INR 2.75 billion that analysts had expected. The total revenue from operations was INR 7.87 billion, sharply higher than the INR 5.79 billion expected by analysts. The growth in total revenue was driven mainly by the growth in interest income, which rose over 19% on year. Sequentially, the company's net profit fell 4.6% while revenue grew 4.6%.

The total expenses of the lender were INR 4.36 billion for the reporting quarter, up 12.2% on quarter and up 30% on year. The rise in expenses was mainly on account of a sharp increase in employee costs, which rose 27% on year to INR 1.56 billion. This was reflected in the total headcount of the lender, which rose to 12,043 from 9,358 a year ago. An 18% on-year increase in finance costs to INR 1.87 billion, and a tripling of investment provisions to INR 477 million also raised overall costs sharply. The company said it had added 19 branches during the quarter, which pushed its total branch count to 767 from 547 branches a year ago.

The assets under management of the lender grew to INR 124.58 billion at the end of June, up 20% on year and 5% on quarter. Disbursements during the current quarter were INR 13 billion, down 2% on year and down 12% sequentially. Gross stage-3 assets of the company were at 2.46% of total assets as at the end of June, while the net stage-3 assets were at 1.25% of total assets. The provision coverage ratio of the lender for stage-3 loans stood at 50.02% while provisions for expected credit loss were INR 2.41 billion.

The lender said its borrowings totalled INR 78.72 billion as of Jun. 30 and its overall cost of funds for the borrowing for the quarter was 9.54%, down from 9.63% in the trailing quarter. Five Star said its net interest margin for the quarter was 16.43%, down from 16.72% in the year-ago quarter and from 16.84% in the trailing quarter.

The company also said its Joint Managing Director and Chief Executive Officer Rangarajan Krishnan had resigned to pursue an entrepreneurial journey.

Shares of Five-Star Business Monday closed 2.9% lower at INR 670.15 on the National Stock Exchange. The lender detailed its earnings after market hours.  End

Edited by Tanima Banerjee

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