FIVESTAR
Small CapFive-Star Business Finance Limited
Financial Services
Five-Star Business Finance Limited is an NBFC providing secured financial solutions to small business customers and self-employed individuals with informal incomes, largely cut-off from the formal lending ecosystem. All loans are secured against borrower property, typically self-occupied residential property. The company operates 844 branches across 11 states/UTs.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Mixed fundamentals, management trust needs verification, price trend argues for patience, and recent execution is consistent.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
low confidence · 0/0 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 31 Mar 2026
Bad · 0/100PAT -4% YoY · Rev +9% YoY
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹817 Cr | +8.6% | +0.3% |
| EBITDA | NDF | NDF | NDF |
| Operating margin | NDF | NDF | NDF |
| PAT | ₹269 Cr | -3.6% | -2.9% |
| PAT margin | 32.9% | -417 bps | -106 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Where growth can come from, and what can break the case
Q4FY26 PAT declined 4% YoY and 3% QoQ, while AUM grew 11% YoY and 2% QoQ. Asset quality deteriorated with GNPA rising to 3.37% (vs 1.79% YoY) and credit cost surging 138% YoY.
Despite management's claim that 'the worst is behind us' and strong collection efficiency, the significant deterioration in asset quality metrics (GNPA, NNPA, credit cost) and flat to declining profitability (PAT, RoE) in Q4FY26 raises concerns. The company's ability to achieve its ambitious AUM growth target while simultaneously improving asset quality and profitability remains a key challenge.
AUM by State (FY26)
Latest issuer-disclosed distribution across 7 reported categories.
AUM Growth Target
Management is 'geared to get back on the track of growth' and 'well-poised to achieve AUM growth of around 20% for FY27 and thereafter'.
Robust Credit Underwriting & Collections
Company aims for strong, sustainable growth, quality, and profitability through 'robust credit underwriting, strong collections, and proactive risk management'.
Technology and AI Adoption
Growth and risk management will be 'backed by use of appropriate technology and AI', including ML models for risk scoring and GenAI for document processing and voice bots.
Branch Network Expansion
9 branches were opened during Q4FY26, bringing the total to 844 branches.
Strong Collection Performance
Q4FY26 unique customer collection efficiency (excluding NPA loans) was 98.1%, 'one of the best in the history of the Company'.
Reduced Slippage Ratio
Slippage ratio dropped from 1.09% in Q3FY26 to 0.70% in Q4FY26, helping contain NPA levels.
Diversified and Cost-Effective Funding
Company aims for growth supported by a 'diversified and cost-effective funding profile'. Book COF dropped ~70 bps during FY26.
Deteriorating Asset Quality
GNPA increased to 3.37% in Q4FY26 from 1.79% in Q4FY25. NNPA rose to 2.00% from 0.88% over the same period.
Surging Credit Costs
Credit cost to average AUM increased significantly to 1.88% in Q4FY26 from 0.90% in Q4FY25, impacting profitability.
Profitability Decline
PAT declined 4% YoY and 3% QoQ in Q4FY26. Return on Equity (RoE) for FY26 was 16.06% vs 18.68% in FY25.
Past Senior Management Exits
Management noted 'Senior Management exit that we saw during the year has had no impact on our performance', indicating past instability.
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
For an NBFC, both year-on-year (YoY) and quarter-on-quarter (QoQ) comparisons are crucial. YoY provides a view on overall growth and seasonal trends, while QoQ highlights sequential momentum in disbursements, asset quality, and profitability, which are vital for assessing operational performance and credit cycle shifts.
Loan Portfolio (AUM)
Q4FY26 AUM was ₹132,246 Mn, up 11% YoY and 2% QoQ. FY26 AUM grew 11% YoY.
Loan Disbursement
Q4FY26 disbursements were ₹12,133 Mn, down 17% YoY and up 24% QoQ. FY26 disbursements were ₹46,757 Mn, down 6% YoY.
Net Interest Margin (NIM)
Q4FY26 NIM was 20.07% (vs 20.72% YoY, 19.57% QoQ). FY26 NIM was 19.86% (vs 20.46% YoY).
Cost of Borrowing
Q4FY26 cost of borrowing was 8.95% (vs 9.63% YoY, 9.12% QoQ). FY26 cost of borrowing was 9.21% (vs 9.64% YoY).
Optimistic Outlook
Management believes 'the worst is behind us and there is only one direction that we will be moving in, in the coming years'.
FY27 AUM Growth Target
Company is 'well-poised to achieve AUM growth of around 20% for FY27 and thereafter'.
Focus on Sustainable Growth
Management will 'aim at achieving strong yet sustainable growth, quality and profitability'.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| AUM Growth | 11% YoY (FY26) | Progress towards 20% AUM growth target for FY27. |
| Gross NPA | 3.37% (Q4FY26) | Stabilization or reduction in GNPA and slippage ratios, indicating asset quality improvement. |
| Credit Cost | 1.88% (Q4FY26) | Moderation in credit costs, which have significantly impacted profitability. |
| Net Interest Margin (NIM) | 20.07% (Q4FY26) | Maintenance or improvement in NIM, supported by stable yields and declining cost of funds. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Trend score and candlestick chart
42NeutralSMA20 -6.5% / mo
Technical chart
FIVESTARdaily · 6M-23.8%Technical trend read
NeutralTrend is undirectional — long-term trend unclear. RSI 40.
- SMA20 falling (~7.7% over last month) — short-term momentum negative.
- RSI(14) at 40 — sideways, no extreme reading.
- MACD below signal but histogram contracting — bearish momentum easing.
- 29% off 52W high · 27% above 52W low.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Valuation, score drivers, trust methodology, financials, and peers
Use these sections after reviewing the decision summary, latest result, thesis, management accountability, and technical timing above.
Fundamental score breakdown
FAIR VALUEWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- Fair-value margin of safety is positive at 80.1%.
- Valuation contributes 22/30 to the score.
- Quality contributes 10/20 to the score.
Main drags
- Cash flow is weaker at 0/10; verify the latest quarterly trend.
- Balance sheet is weaker at 4/15; verify the latest quarterly trend.
- Growth is weaker at 11/25; verify the latest quarterly trend.
NBFC valuation: P/B, ROA, borrowing cost, and asset quality
Lenders can look optically cheap before credit losses emerge, so valuation is tied to book quality.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: +1 points.
Factor attribution
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Mixed Trust: Claim history is still being built. It ranks around the 24th percentile of the scored universe and 39th percentile within Financial Services. Main check: cash conversion is weak at 28/100.
Mixed Trust Lite: Promoter pledge is zero. Key concern: Operating cash flow is negative at ₹-951 Cr.
Usable, but needs evidence. Treat guidance with a margin of safety.
overall median 67 · Financial Services: 39th pctile, median 62 · Small: 28th pctile, median 65
76 documents indexed, but claim history is not strong enough yet.
0 claims extracted · No contradicted claim yet
How to read this Trust Score
Mixed Trust · low confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter pledge is zero.
- ▸4/4 latest quarters had positive YoY revenue growth.
- ▸3/4 latest quarters had positive YoY PAT growth.
Trust risks
- ▸Operating cash flow is negative at ₹-951 Cr.
- ▸Promoter holding is only 18.6%.
- ▸Promoter holding fell 2.9%.
- ▸Only 0 years of positive FCF.
Trust Lite uses financial behaviour only. Prefer claim-tested Trust when enough concall claims have later outcomes.
Intrinsic value
Fundamentals
Valuation
- P/E
- 79.40
- P/B
- —
- EV/EBITDA
- 3347.25
- Market Cap
- 12434.00Cr
Profitability
- ROE
- 16.00%
- ROCE
- 17.00%
- ROA
- 6.68%
- Dividend Y
- 0.47%
Growth (CAGR)
- Revenue 5Y
- 15.00%
- EPS 5Y
- 15.00%
- Revenue 3Y
- 30.00%
- EPS 3Y
- 37.50%
Balance Sheet
- Debt/Equity
- 0.70
- Interest Coverage
- —
- Altman Z
- 7.01
- Book Value
- —
Cash Flow
- FCF Yield
- —
- FCF Positive Y
- 0/5
- OCF
- -951.00 Cr
- EPS TTM
- 65.55
Shareholding
- Promoter Hold
- 18.61%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 17%
Financial History
Updated 9/6/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
Business-comparable peers in Financial Services — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.