Five-Star Business Finance Limited has extended the tenure of R. Vijayaraghavan as its Chief Compliance Officer for a period of three years. The Board of Directors approved the extension during a meeting held on July 25, 2026, ensuring continuity in regulatory oversight for the non-banking financial company. The new term is effective from October 1, 2026.

The decision aligns with the Reserve Bank of India circular dated April 11, 2022, read with the RBI (Non-Banking Financial Companies - Governance) Directions. The approval was made based on the recommendations of the Nomination and Remuneration Committee. The company disclosed the development pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.

Tenure and Compliance Details

Vijayaraghavan, who has been associated with Five-Star Business Finance Limited for the last three years, assumed the role of Chief Compliance Officer in October 2023. His extension maintains stability in the company's compliance function, which is critical for an NBFC operating under strict regulatory scrutiny. The disclosure also references SEBI Master Circular no. HO/49/14/14(7)2025-CFD-POD2/1/3762/2026 dated January 30, 2026, regarding the intimation of such events.

Profile of Chief Compliance Officer

R. Vijayaraghavan is a qualified Company Secretary and Cost Accountant with approximately 38 years of work experience. His expertise spans legal precision, dispute resolution, financial acumen, and regulatory strategy. Prior to joining Five-Star Business Finance Limited, he served at J.K. Fenner (India) Limited, where he handled compliance, internal audit, litigation, dispute resolution, and intellectual property matters.

The company stated that this disclosure is available on its website under the compliances section. Vigneshkumar S M, Company Secretary & Compliance Officer, signed the intimation to the National Stock Exchange of India Limited and BSE Limited.

Five-Star Business Finance Limited reported a standalone net profit of ₹271.4 crore for Q1FY27, marking a 1.9% year-on-year increase from ₹266.3 crore in Q1FY26. The NBFC achieved its highest-ever quarterly disbursements at ₹1,496 crore, up 16% YoY and 23% sequentially, driving Assets Under Management (AUM) growth of 10% to ₹13,722 crore. This operational momentum offset slight margin compression, as the company navigated higher employee costs while maintaining robust collection efficiency. The unaudited financial results were formally published in the English newspaper Financial Express and the Tamil newspaper Makkal Kural on July 26, 2026, as per regulatory requirements.

The Board of Directors, meeting on July 25, 2026, approved the unaudited financial results reviewed by Statutory Auditors M/s Deloitte Haskins & Sells under Regulation 33 and Regulation 52 of the SEBI LODR Regulations. The audit firm issued an unmodified limited review report. Additionally, the Board submitted the security cover certificate for non-convertible debentures as per Regulation 54(2) and 54(3) of the SEBI LODR Regulations. The company also appointed Mr. Sreeram Ranganathan Iyer as an Additional Director in the capacity of Non-Executive Independent Director, effective July 25, 2026, subject to shareholder approval at the upcoming Annual General Meeting scheduled for August 31, 2026.

Key Financial Metrics

The following table summarizes the key financial performance indicators for the quarter:

Total revenue from operations grew 5.4% to ₹828.9 crore, primarily supported by a rise in interest income to ₹807.6 crore from ₹764.7 crore in the prior year quarter. Fees and commission income also increased to ₹13.6 crore from ₹9.6 crore. However, total expenses rose 9.1% to ₹476.8 crore, largely due to higher employee benefit expenses of ₹188.9 crore compared to ₹156.1 crore in the previous year. Impairment on financial instruments stood at ₹61.8 crore, up from ₹47.8 crore YoY.

Operational Highlights and Asset Quality

Chairman & Managing Director Lakshmipathy Deenadayalan highlighted that Q1FY27 represents a positive beginning to the fiscal year, underpinned by strong traction in disbursements and stabilization in collections. Unique customer collection efficiency (excluding NPAs) remained strong at 97.9%, compared to 98.1% in Q4FY26. X-bucket collections stood at 99.2%, reflecting sustained repayment discipline. The slippage ratio remained steady at 0.70%, similar to Q4FY26, while credit cost improved to 1.85% of average AUM from 1.88% in the preceding quarter.

The table below captures key asset quality metrics:

Gross Stage 3 Assets increased marginally to 3.46% from 3.37% in Q4FY26 and 2.46% in Q1FY26. Net Stage 3 Assets rose to 2.10% from 2.00% in Q4FY26. Total ECL provisions stood at ₹244 crore (excluding inter-corporate deposits), translating to 1.78% of overall AUM. The debt-equity ratio improved to 1.03 from 1.11, signaling a stronger capital base.

Funding and Liquidity

The company availed incremental debt of ₹450 crore during the quarter at an all-inclusive cost of 8.33%. The cost of funds on the overall borrowing book eased sequentially to 8.80% from 8.95% in Q4FY26, a reduction of 15 basis points, despite uncertain liquidity conditions. Total borrowings, including debt securities, stood at ₹7,866 crore as of June 30, 2026. The company maintained liquidity of ₹1,847 crore, resulting in a liquidity coverage ratio of 296%. Net Interest Margin (NIM), computed as a percentage of Average AUM, remained stable at 19.97%, down slightly from 20.07% in Q4FY26.

What the Numbers Show

While revenue growth remained healthy at 5.4%, the net profit margin contracted slightly to 32.36% from 33.66% in Q1FY26. This divergence indicates that cost pressures, particularly in employee benefits and impairments, outpaced top-line gains. However, the significant improvement in disbursement volumes (+23% QoQ) and AUM growth (+10% YoY) suggests that the company is successfully scaling its portfolio. The stabilization of credit costs and steady slippage ratios indicate that asset quality remains manageable despite the marginal rise in Stage 3 assets. The reduction in cost of funds supports future margin expansion if yield trends stabilize.