FIVE-STAR BUSINESS FINANCE Q2 CONCALL : RECORD DISBURSEMENTS UP 74% YOY, AUM UP 14% & MANAGEMENT EXPECTS TO EXCEED FY27 GROWTH GUIDANCE

• MANAGEMENT EXPECTS FY27 AUM GROWTH TO COMFORTABLY EXCEED EARLIER GUIDANCE, WITH A REVISED GROWTH TARGET LIKELY TO BE CONSIDERED AFTER Q3 FY27 • MANAGEMENT EXPECTS STRONG DISBURSEMENT MOMENTUM DURING H2 FY27, WITH APPROXIMATELY ₹550 CR DISBURSEMENTS IN OCTOBER & FURTHER IMPROVEMENT EXPECTED IN NOVEMBER–DECEMBER • MANAGEMENT EXPECTS CREDIT COST TO REMAIN BROADLY STABLE AROUND 1.8% FOR THE REMAINDER OF FY27, WITH SLIPPAGES NEAR 0.70% • MANAGEMENT EXPECTS BORROWING COSTS TO INCREASE, WITH FY27 EXIT COST OF FUNDS PROJECTED AROUND 8.90%, RESULTING IN SOME NET INTEREST MARGIN COMPRESSION • Q2 DISBURSEMENTS SURGED 74% YOY & 39% QOQ TO A RECORD ₹2,078 CR, SUPPORTED BY IMPROVING COLLECTIONS & STRONGER LOAN DEMAND • AUM UP 14% YOY & 6.7% QOQ TO ₹14,640 CR, WHILE ACTIVE LOANS INCREASED 5% YOY TO APPROXIMATELY 5.1 LAKH • Q2 NET PROFIT UP 5% YOY & 10% QOQ TO ₹299 CR, INCLUDING A ONE-TIME TAX BENEFIT; ADJUSTED PROFIT STOOD AT APPROXIMATELY ₹280–281 CR • NET INTEREST MARGIN DECLINED 10 BPS QOQ TO 19.87%, WHILE LENDING YIELD STOOD AT 22.26% & COST OF FUNDS AT 8.78% • COMPANY INCREASED INTEREST RATES ON NEW LOANS BY APPROXIMATELY 100 BPS FROM OCTOBER 2026, WITH THE BENEFIT EXPECTED TO FLOW GRADUALLY INTO THE LOAN BOOK • UNIQUE CUSTOMER COLLECTION EFFICIENCY IMPROVED TO 98.2%, WHILE 30+ DAYS PAST DUE DECLINED TO 11.5% FROM 12.38% QOQ • GROSS STAGE 3 ASSETS STOOD AT 3.48%, WITH MANAGEMENT EXPECTING MEANINGFUL IMPROVEMENT OVER THE NEXT COUPLE OF QUARTERS • MANAGEMENT TARGETS OPERATING EXPENSE RATIO OF 6.75–7% OVER THE NEXT TWO YEARS, COMPARED WITH APPROXIMATELY 7.5% CURRENTLY • COMPANY ADDED 19 BRANCHES DURING Q2 & 75 BRANCHES OVER THE PAST YEAR, WHILE EXPANDING LENDING TO HIGHER-TICKET CUSTOMERS • LIQUIDITY REMAINS COMFORTABLE AT APPROXIMATELY ₹1,300 CR, WITH ADDITIONAL UNDRAWN BORROWING SANCTIONS OF APPROXIMATELY ₹1,100 CR • MANAGEMENT REMAINS CONFIDENT ABOUT GROWTH RECOVERY, BUT RISING FUNDING COSTS, STICKY NPAS, MICROFINANCE BORROWER OVERLAP & POTENTIAL MARGIN COMPRESSION REMAIN KEY RISKS

FIVE-STAR BUS FIN LTD

← Back to feed