Five-Star Business Finance Q1FY27 Results: PAT Rises to ₹271 Crore, Asset Quality Remains Strong

Five-Star Business Finance Q1FY27 Results: PAT Rises to ₹271 Crore, Asset Quality Remains Strong

Five-Star Business Finance Limited announced its financial results for the quarter ended 30 June 2026 (Q1FY27), delivering another quarter of steady growth backed by healthy loan expansion, stable asset quality, and strong profitability. Despite an increase in impairment provisions during the quarter, the NBFC continued to maintain one of the strongest balance sheets in the industry, supported by robust capital adequacy and ample liquidity.

The company reported Revenue from Operations of ₹828.98 crore, while Net Profit (PAT) increased to ₹271.41 crore. Asset quality remained stable, with Gross Stage-3 Assets at 3.46% and Net Stage-3 Assets at 2.10%. Additionally, the company maintained a Capital Adequacy Ratio (CRAR) of 51.25% and an impressive Liquidity Coverage Ratio (LCR) of 296%, reinforcing its strong financial position.

Here's a detailed look at Five-Star Business Finance's Q1FY27 performance.

Q1FY27 Financial Highlights

Revenue from Operations

Five-Star Business Finance reported Revenue from Operations of ₹828.98 crore during Q1FY27.

Compared to ₹786.68 crore in the corresponding quarter last year, the company continued to record healthy business growth, driven by expansion in its lending portfolio.

Total Income

The company reported Total Income of ₹838.74 crore, reflecting continued momentum across its lending operations and fee-based income streams.

Interest Income

Interest Income, the company's primary source of revenue, increased to ₹807.61 crore, compared to ₹764.68 crore in Q1FY26.

The steady increase reflects continued loan book expansion and healthy demand across its target customer segments.

Fee & Commission Income

Fee and Commission Income improved to ₹13.59 crore, contributing additional income beyond lending operations.

Other Income for the quarter stood at ₹9.76 crore.

Profitability Remains Healthy

Despite higher credit provisioning during the quarter, the company continued to deliver strong profitability.

Profit Before Tax (PBT)

₹361.95 crore

The company maintained healthy operating profitability despite higher finance costs and impairment expenses.

Net Profit (PAT)

Five-Star Business Finance reported Net Profit of ₹271.41 crore during Q1FY27.

The company's consistent profitability highlights the resilience of its lending business and disciplined risk management.

Earnings Per Share (EPS)

Basic EPS stood at ₹9.19, while Diluted EPS came in at ₹9.18 for the quarter.

Total Comprehensive Income

Total Comprehensive Income for the quarter was ₹270.55 crore, reflecting stable overall financial performance.

Expense Profile

The company witnessed an increase in expenses as it continued expanding its lending operations.

Finance Costs

Finance Costs increased to ₹171.51 crore, primarily due to higher borrowings used to support future business growth.

Employee Benefit Expenses

Employee Benefit Expenses stood at ₹188.88 crore, reflecting continued investments in human resources and business expansion.

Depreciation & Amortisation

Depreciation and Amortisation expenses were reported at ₹9.21 crore during the quarter.

Impairment on Financial Instruments

The company recorded ₹61.82 crore as impairment on financial instruments.

While impairment costs increased compared to earlier periods, the provisioning reflects prudent credit risk management and conservative lending practices.

Total Expenses

Overall, Total Expenses for Q1FY27 stood at ₹476.79 crore.

Asset Quality Remains Stable

One of the biggest strengths of Five-Star Business Finance continues to be its disciplined underwriting standards.

As of 30 June 2026

Gross Stage-3 Assets

3.46%

Net Stage-3 Assets

2.10%

Both ratios remained broadly stable compared to the previous quarter, indicating healthy collection efficiency and prudent risk management despite operating in the retail lending segment.

Strong Balance Sheet

The company continues to maintain one of the strongest balance sheets among listed NBFCs.

Net Worth

₹7,653.42 crore

Debt-to-Equity Ratio

1.03x

A relatively low leverage ratio provides flexibility for future business expansion.

Capital Adequacy Ratio (CRAR)

51.25%

The exceptionally high capital adequacy ratio provides a significant cushion for future loan growth and unexpected credit risks.

Liquidity Coverage Ratio (LCR)

296%

The company's liquidity position remains extremely comfortable, providing sufficient funding flexibility even during volatile market conditions.

Security Cover

Security Cover for Listed Non-Convertible Debentures (NCDs) stood at 1.19x, reflecting adequate asset backing.

Corporate Developments

Alongside its financial results, the Board approved several important corporate decisions.

The company appointed Mr. Sreeram Ranganathan Iyer as an Additional Director and Non-Executive Independent Director for a five-year term, subject to shareholder approval.

The Board also approved a three-year extension of Mr. R. Vijayaraghavan's tenure as Chief Compliance Officer, effective 1 October 2026.

Additionally, Suri & Co., Chartered Accountants has been proposed as Joint Statutory Auditors for a three-year term, subject to shareholder approval.

Key Positives

✅ Revenue from Operations increased to ₹828.98 crore.

✅ Net Profit remained strong at ₹271.41 crore.

✅ Interest Income continued to grow steadily.

✅ Healthy profitability despite higher impairment costs.

✅ Asset quality remained stable.

✅ Capital Adequacy Ratio stood at an impressive 51.25%.

✅ Liquidity Coverage Ratio remained exceptionally strong at 296%.

✅ Low Debt-to-Equity ratio supports future expansion.

Key Concerns

Investors should continue monitoring

• Credit costs.
• Impairment expenses.
• Asset quality trends.
• Loan portfolio growth.
• Funding costs.
• Interest rate movements.
• Margin sustainability.
• Competitive pressure in retail lending.

What Investors Should Watch

Going forward, investors should closely monitor

• Loan book growth.
• Net Interest Income.
• Collection efficiency.
• Asset quality.
• Credit costs.
• Return on Assets (RoA).
• Return on Equity (RoE).
• Borrowing costs.
• Management commentary.
• Future lending growth.

These factors will largely determine the company's earnings trajectory over the coming quarters.

Final Thoughts

Five-Star Business Finance delivered another stable quarter with healthy revenue growth, solid profitability, and one of the strongest capital positions among India's listed NBFCs. Although impairment expenses increased during the quarter, the company continued to maintain stable asset quality while generating strong earnings.

Its robust capital adequacy, ample liquidity, disciplined underwriting, and resilient balance sheet position it well for sustainable long-term growth. Investors are likely to closely monitor loan expansion, asset quality, and funding costs as the company continues to strengthen its lending franchise.

Question for Investors

Do you believe Five-Star Business Finance can sustain its strong profitability and asset quality while continuing to expand its loan book?

Share your views in the comments.

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Disclaimer

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