Shares of Five-Star Business Finance Limited fell by 5.16%, trading at ₹748.60 during Friday’s session, despite the company reporting strong Q3 FY25 results with significant profitability growth and stable asset quality.
The company’s assets under management (AUM) surged 25% year-on-year (YoY) to ₹11,178 crore, up from ₹8,931 crore. Total income rose 28% YoY to ₹731 crore, compared to ₹571 crore in Q3 FY24. Net profit stood at ₹274 crore, marking a 26% increase from ₹217 crore in the corresponding quarter last year.
However, operational challenges, including a 22% YoY decline in disbursements to ₹941 crore and an uptick in gross Stage 3 assets to 1.62% from 1.40% YoY, may have weighed on investor sentiment.
Key Financial Highlights:
- Total Income: ₹731 crore, up 28% YoY
- Net Profit: ₹274 crore, a 26% YoY increase
- Net Interest Margin (NIM): 16.56%, marginally down from 16.80% YoY
- ROE: Improved to 18.49%, up 75 bps YoY
Operational and Asset Quality Update:
The company added 69 new branches, expanding its network to 729 across 10 states/UTs. However, the increase in gross Stage 3 assets and provision coverage of 50.20% on Stage 3 loans reflected caution amid broader sector challenges.
Management Commentary:
Chairman and Managing Director, Mr. Lakshmipathy Deenadayalan, expressed confidence in the company’s collections-first strategy, which has enabled consistent growth despite sector-wide pressures.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Please consult financial experts before making any investment decisions.
