Five-Star Business Finance Limited reported a net profit of ₹271 crore for the quarter ended June 30, 2026 (Q1FY27), driven by record quarterly disbursements of ₹1,496 crore and improved asset quality metrics. The company’s Assets Under Management (AUM) grew sequentially by 4% to reach ₹13,722 crore, while credit costs decreased to 1.85% from 1.88% in the previous quarter. This performance marks a significant turnaround after four quarters of operational challenges, with management expressing confidence in achieving full-year growth guidance comfortably.

The earnings conference call, held on July 27, 2026, was moderated by DAM Capital. The transcript was subsequently released to investors on July 31, 2026, in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Vigneshkumar S M, Company Secretary & Compliance Officer, issued the notification to the National Stock Exchange of India Limited and BSE Limited.

Financial Performance and Operational Metrics

Five-Star Business Finance achieved its historical best in quarterly disbursements, recording a 23% growth over the previous quarter and 16% year-on-year growth. The company crossed a significant milestone of 500,000 active loan customers as of June 30, 2026. Branch expansion continued with the addition of 12 new branches, primarily in Maharashtra, bringing the total count to 856.

Asset Quality and Collections

Collections remained robust despite the seasonally soft nature of the quarter. Unique customer collection efficiency stood at 97.9%, slightly down from 98.1% in the previous quarter, while x-bucket collections were at 99.2%. The current book improved to 83.30% from 82.69%, and the 30-plus delinquency bucket reduced to 12.38% from 12.69%. Management highlighted that slippages are expected to trend down in subsequent quarters, with gross NPAs guided to fall below 3%.

What the Numbers Show

The improvement in profitability is largely attributable to effective cost management rather than yield expansion. While asset yields dropped by 12 basis points to below 22.5%, this was more than compensated by a 15 basis point reduction in the average cost of funds, which fell to 8.80% from 8.95%. This dynamic resulted in a spread that was 3 basis points higher than the previous quarter. Management indicated that operating expenses will remain flat year-on-year at approximately 5.75% to 6% of total assets, with steady-state costs expected to normalize to 5.25%–5.5% from FY28 onwards. The company also clarified that it does not resort to Asset Reconstruction Company (ARC) sales for NPA resolution.

Strategic Outlook and Guidance

Management reaffirmed its guidance for full-year loan growth of 20%. Chairman and Managing Director Lakshmipathy Deenadayalan emphasized that the institution is not dependent on a few individuals but on its 15,000 employees. The company plans to launch a new product within the next three to six months to diversify beyond its core micro LAP portfolio, aiming to enhance returns and leverage. Joint Managing Director and CFO Srikanth Gopalakrishnan noted that incremental borrowing costs are expected to remain around 8.5%, allowing for further compression in the overall cost of funds if repo rates remain stable.

Five-Star Business Finance will host a virtual investor meeting with Schroders on August 4, 2026. The one-on-one session is part of the company’s regular engagement with market participants and aims to provide clarity on its business operations using only publicly disclosed data.

The intimation was filed with the National Stock Exchange of India Limited and BSE Limited pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 (SEBI LODR), read with Part A of Schedule III to SEBI LODR. This regulatory filing ensures transparency in investor communications and maintains compliance with disclosure norms.

The company emphasized that the discussions during the meeting will be strictly based on publicly available information. Management explicitly stated that no unpublished price-sensitive information (UPSI) is intended to be discussed, adhering to insider trading regulations and fair disclosure principles.

An updated Investor Presentation has been uploaded to the company’s website at https://fivestargroup.in/investor-presentation/ to support the dialogue. This document was also intimated to the stock exchanges via a letter dated July 25, 2026, ensuring that all investors have equal access to the material presented.

The announcement was signed by Vigneshkumar SM, Company Secretary & Compliance Officer, on July 29, 2026. The company noted that changes to the schedule may occur due to exigencies on the part of the host or the company, advising participants to monitor official communications for any updates.