Five-Star Business surges after Q2 PAT climbs 7% YoY to Rs 286 cr

Profit before tax (PBT) rose 6.62% YoY to Rs 381.92 crore in Q2 FY26.

The company's asset under management (AUM) jumped 18% to Rs 12,847 crore in Q2 FY26, compared with Rs 10,927 crore in Q2 FY25.

Disbursements stood at Rs 1,196 crore, registering de-growth of 4% compared with Rs 1,251 crore posted in corresponding quarter last year.

Overall collection efficiency and unique customer collection efficiency for the quarter stood at 96.7% and 95.1% respectively.

Expected credit loss (ECL) provision carried on books was amounted to Rs 243 crore (excluding ECL maintained on inter-corporate deposits), representing 1.89% of the overall AUM. Stage 3 provision was at Rs 153 crore, with a provision coverage ratio of 45.19%.

Total borrowings including debt securities stood at Rs 8,376 crore as on 30th September'25. The cost of funds on overall borrowing book for the quarter eased to 9.27% in Q2 FY26 as against 9.54% in Q1 FY26.

Lakshmipathy Deenadayalan, chairman & managing director, said, 'As we had updated in the last quarter, we have seen a stable performance from Five Star during the current quarter, across various metrics. The downtrend that we witnessed in Q1FY26 has been arrested in the current quarter, and from here onwards, we believe that we would see some green shoots emerging in Q3 and a much stronger performance in Q4.

We have taken several strategies and actions towards this across sourcing, credit underwriting, collections and risk oversight. These are marked out as focus areas for us in the quarters to come, and we believe these will pave the way for building a bigger and stronger portfolio in the coming quarters.

Our investment in physical infrastructure and people continues as can be seen from the addition of 33 branches and 769 Business & Collections Officers during Q2FY2026. During this quarter, we disbursed Rs 1,196 crore of loans as against Rs 1,290 crore in Q1FY2026, and the drop in disbursements can be attributed to the additional controls that have been implemented for the first time during this quarter towards onboarding the right customers. With our system getting attuned to these changes, we should start seeing increase in disbursements and increased AUM growth in the quarters to come.'

Five-Star Business Finance is a non-banking finance company (NBFC-ND-SI) registered with Reserve Bank of India. The company primarily offers small loans for business purposes, asset creation and other economic purposes to small business customers and self-employed individuals after due underwriting of their cashflows and backed by the collateral of their house property.

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