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Five Star Business Finance
SectorFinancial Services
Five-Star Business Finance Limited is a non-deposit-taking Non-Banking Finance Company (NBFC) incorporated in Chennai, Tamil Nadu. The company provides secured business loans to micro-entrepreneurs and self-employed individuals, primarily for business purposes, house renovation/extension, and other mortgage purposes. Loans range from approximately Rs. 1 lakh to Rs. 10 lakhs with tenures up to seven years. The company operates through a network of 373 branches as of March 31, 2023, with a strong presence in South India, particularly in Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka. Five-Star Business Finance sources loans in-house through branch-led marketing, repeat customers, and walk-ins. The company completed its Initial Public Offer in November 2022, listing on the National Stock Exchange and Bombay Stock Exchange.
In the news
Motilal Oswal Maintains ₹685 Target for Five Star Business Finance
IFCI, Five-Star Business Finance Recommended by HDFC Securities
Motilal Oswal sets ₹600 target for Five Star Business Finance
Motilal Oswal sets ₹590 target for Five Star Business Finance
Company insights, generated from the most recent coverage.
Management guided for 10–15 bps yield compression over next couple of quarters; for an NBFC this directly hits NIMs and is prompting a lower re-rating.
Technical sell signal triggered from a pivot top on Sep 11, 2026; stock down ~5.5% since with no clear support floor established yet.
Trading window closes Oct 1, 2026 ahead of Q2/H1 FY27 results — pre-results positioning is pressuring the stock as investors trim ahead of potentially mixed numbers.
The Quarter story
The two most recent quarterly results, compared side-by-side.
Five-Star Business Finance expands its loan book and cuts funding costs, but rising NPAs and operating expenses weigh on efficiency.
Loan portfolio grew from ₹124,578 in Q1 FY26 to ₹137,218 in Q1 FY27, showing steady credit expansion.
Gross NPA rose from 2.46% in Q1 FY26 to 3.46% in Q1 FY27, indicating deteriorating asset quality.
Borrowing cost fell from 9.54% in Q1 FY26 to 8.33% in Q1 FY27, improving funding efficiency.
Operating cost to income ratio climbed from 33.45% in Q1 FY26 to 36.62% in Q1 FY27, pressuring operational efficiency.
Digital collections rose from 81% in Q1 FY26 to 86% in Q1 FY27, streamlining cash recovery.
Credit cost to income ratio increased from 7.92% in Q1 FY26 to 9.24% in Q1 FY27, raising provisioning needs.
Net interest income increased from ₹6,039 in Q1 FY26 to ₹6,672 in Q1 FY27, driving core earnings.
Bank balances dropped from ₹4,439 in Q1 FY26 to ₹935 in Q1 FY27, tightening short-term liquidity.
Debt to equity ratio improved from 1.20x in Q1 FY26 to 1.03x in Q1 FY27, strengthening the capital base.
Return on equity declined from 16.57% in Q1 FY26 to 14.46% in Q1 FY27, moderating capital efficiency.