Five-Star Business Finance Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript Five-Star Business Finance Ltd filed with BSE on 06 May 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Five-Star Business Finance reported Q4 FY26 collection efficiency improvements after a challenging year, with disbursements of Rs 1,213 crore for the quarter and full-year PAT of Rs 1,099 crore, up 2% year-on-year. Management said asset quality metrics such as slippage ratio and x-bucket collections improved sequentially, while credit cost and NPA remained broadly stable. The company guided to around 20% AUM growth for FY27 and discussed steady-state credit cost, opex, and funding cost trends for the coming year.
Numbers mentioned
Unique customer collection efficiency: 98.1% (Q4 FY26)
p. 3
“we clocked a unique customer collection efficiency of 98.1%, which is one of our best in the history of Five-Star”
Lakshmipathy D, page 3 of the filed PDF · View the filing
X-bucket collections: 99.3% (Q4 FY26)
p. 3
“Our x-bucket collections for the quarter came in at 99.3%, which has helped contain forward flows from x-bucket.”
Lakshmipathy D, page 3 of the filed PDF · View the filing
Slippage ratio: 0.7% (Q4 FY26)
p. 3
“Our slippage ratio has dropped from 1.9% in the last quarter to 0.7% in this quarter.”
Lakshmipathy D, page 3 of the filed PDF · View the filing
NPA: 3.37% (Q4 FY26)
p. 3
“This has helped our NPA remain largely stable between quarters at 3.37%.”
Lakshmipathy D, page 3 of the filed PDF · View the filing
Credit cost: 1.88% of average AUM (Q4 FY26)
p. 3
“Credit cost has remained largely stable at 1.88% of the average AUM for Q4 compared with 1.76% in last quarter.”
Lakshmipathy D, page 3 of the filed PDF · View the filing
Current bucket proportion: 82.69% (Q4 FY26)
p. 4
“the current proportion of customers who are in current buckets has moved up by close to 1% from 81.77% in Q3 to 82.69% in Q4”
Lakshmipathy D, page 4 of the filed PDF · View the filing
Disbursement: INR1,213 crores (Q4 FY26)
p. 4
“Our disbursement for the quarter came in at INR1,213 crores, an increase of 24% over the previous quarter.”
Lakshmipathy D, page 4 of the filed PDF · View the filing
Full year disbursement: INR4,675 crores (FY26)
p. 4
“Our disbursement for the full year came in at INR4,675 crores, which has allowed us to clock a portfolio growth of 11% even during a challenging year.”
Lakshmipathy D, page 4 of the filed PDF · View the filing
Incremental debt raised: INR 928 crores at 8.53% (Q4 FY26)
p. 4
“we availed incremental debt of INR 928 crores at an all-inclusive cost of 8.53%”
Lakshmipathy D, page 4 of the filed PDF · View the filing
Cost of funds: 8.95% (Q4 FY26)
p. 4
“Our cost of funds for the quarter dropped from 9.12% in Q3 to 8.95% in Q4”
Lakshmipathy D, page 4 of the filed PDF · View the filing
Full year cost of funds: 9.21% (FY26)
p. 4
“for the full year, we saw a drop in our cost of funds from 9.64% in last year to 9.21% this year”
Lakshmipathy D, page 4 of the filed PDF · View the filing
PAT: INR 269 crores (Q4 FY26)
p. 4
“For the quarter, we achieved a PAT of INR 269 crores, while this is 3% lower as compared to the previous quarter on account of higher personal expense”
Lakshmipathy D, page 4 of the filed PDF · View the filing
Full year PAT: INR1,099 crores (FY26)
p. 4
“we clocked a full year PAT of INR1,099 crores”
Lakshmipathy D, page 4 of the filed PDF · View the filing
Return on average AUM: 8.68% (FY26)
p. 4
“Our return on average AUM and return on equity for the financial year 2026 remains healthy at 8.68% and 16%, respectively.”
Lakshmipathy D, page 4 of the filed PDF · View the filing
Net worth: INR 7,380 crores (Q4 FY26)
p. 5
“Our net worth stands at a very healthy number of about INR 7,400 crores, INR 7,380 crores to be precise.”
Srikanth Gopalakrishnan, page 5 of the filed PDF · View the filing
Overall provision coverage ratio: 1.84% (Q4 FY26)
p. 5
“Our overall coverage is at 1.84%, and on Stage-3 we are at 41.4%.”
Srikanth Gopalakrishnan, page 5 of the filed PDF · View the filing
61-90 day bucket: 4.8% (Q4 FY26)
p. 5
“our 61 to 90-day bucket has actually come down from about 5.1% to 4.8%”
Srikanth Gopalakrishnan, page 5 of the filed PDF · View the filing
Write-off: INR160 crores to INR165 crores (FY26)
p. 15
“our write-off would have been about close to INR160 crores. I can give you the exact number later, but somewhere around INR160 crores to INR165 crores”
Srikanth Gopalakrishnan, page 15 of the filed PDF · View the filing
Digital collections proportion: 84% (Q4 FY26)
p. 15
“we are about 84% of collections, which came in digital, in Q4 FY26”
Srikanth Gopalakrishnan, page 15 of the filed PDF · View the filing
Book yield: 22.6% (Q4 FY26)
p. 10
“for Q4, we were at about 22.6%”
Srikanth Gopalakrishnan, page 10 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
AUM growth — around 20% · FY27
stated firmly by Lakshmipathy D
p. 4
“we are geared up to get back on the track of growth and well-poised to achieve AUM growth of around 20% for the financial year 2027”
Lakshmipathy D, page 4 of the filed PDF · View the filing
Credit cost — 1.7% to 1.75% · FY27
stated conditionally by Srikanth Gopalakrishnan
p. 6
“we will probably be guiding you for a credit cost of 1.7% to 1.75% for the next financial year; depending on how the buckets trend over the year, this could look better from here, but our guidance will be about 1.7% to 1.75%”
Srikanth Gopalakrishnan, page 6 of the filed PDF · View the filing
Steady-state credit cost — 1.5% to 1.6% · next couple of years
stated as an aspiration by Srikanth Gopalakrishnan
p. 7
“we are probably looking at anywhere between 1.5% to 1.6% of credit cost as a steady-state number”
Srikanth Gopalakrishnan, page 7 of the filed PDF · View the filing
Spread — around 13.5% · FY27 and thereafter
stated conditionally by Srikanth Gopalakrishnan
p. 9
“we should be able to operate at a spread of around 13.5%, depending on the leverage, the margins will stack up where they are”
Srikanth Gopalakrishnan, page 9 of the filed PDF · View the filing
ROA — 8.25% to 8.5% · FY27
stated firmly by Srikanth Gopalakrishnan
p. 9
“we believe that we should be able to operate at about 8.25% to 8.5% for this year”
Srikanth Gopalakrishnan, page 9 of the filed PDF · View the filing
Steady-state ROA — 8% to 8.25% · medium term
stated as an aspiration by Srikanth Gopalakrishnan
p. 9
“on a fairly steady-state, also about 8% to 8.25% levels, we should be able to operate”
Srikanth Gopalakrishnan, page 9 of the filed PDF · View the filing
AUM growth — 18% to 20% · next two to three years
stated conditionally by Srikanth Gopalakrishnan
p. 10
“if I have to be conservative and give you a range, it will probably be somewhere between 18% to 20%”
Srikanth Gopalakrishnan, page 10 of the filed PDF · View the filing
Yield impact from rate cut pass-through — 30-40 basis points · next three to four quarters
stated conditionally by Srikanth Gopalakrishnan
p. 10
“I would probably say about 30 - 40 basis points of further impact that may come in over the next three to four quarters”
Srikanth Gopalakrishnan, page 10 of the filed PDF · View the filing
Opex to average AUM — 7% to 7.25% · FY27
stated firmly by Srikanth Gopalakrishnan
p. 12
“our sense is, I think it will largely remain around the 7% to 7.25% levels, and not show any big decline during the year despite the 20% growth that we'll achieve”
Srikanth Gopalakrishnan, page 12 of the filed PDF · View the filing
Disbursements — INR6,500 crores to INR7,000 crores · FY27
stated conditionally by Srikanth Gopalakrishnan
p. 13
“we should be able to get close to about INR6,500 crores to INR7,000 crores of disbursements in the coming year”
Srikanth Gopalakrishnan, page 13 of the filed PDF · View the filing
Cost of funds — closer to 8.5% average borrowing rate · FY27
stated conditionally by Srikanth Gopalakrishnan
p. 20
“we don't expect too much benefit to come in from the cost of funds in the next financial year, but that'll continue to be a monitorable”
Srikanth Gopalakrishnan, page 20 of the filed PDF · View the filing
Pricing — FY27
stated firmly by Srikanth Gopalakrishnan
p. 15
“we don't really envisage at this point of time for any pricing drop to happen at least in FY27”
Srikanth Gopalakrishnan, page 15 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said April is trending in line with typical seasonal patterns and guided credit cost of 1.7% to 1.75% for FY27, with a steady-state of 1.5% to 1.6%.
Answered by Srikanth Gopalakrishnan
Asked by Renish: How is April trending in collections and disbursements, and what credit cost is being built in for FY27?
p. 6
“we will probably be guiding you for a credit cost of 1.7% to 1.75% for the next financial year”
Srikanth Gopalakrishnan, page 6 of the filed PDF · View the filing
Management said the earlier guidance was on total assets and that they now want to build in more consistent buffers given macro volatility and growth focus.
Answered by Srikanth Gopalakrishnan
Asked by Abhijit Tibrewal: What has changed in the environment to justify a higher steady-state credit cost versus historical levels?
p. 7
“we need to maintain a good balance between the right growth number and the right credit cost, which is where we believe that I think 1.5% to 1.6% will be a comfortable number”
Srikanth Gopalakrishnan, page 7 of the filed PDF · View the filing
Management said exposure to potentially affected segments like NRI remittances is sub-1% of the portfolio and repayments are normal.
Answered by Srikanth Gopalakrishnan
Asked by Abhijit Tibrewal: Is the company seeing any impact from the West Asia geopolitical conflict on its self-employed customer base?
p. 8
“we are also of the belief that we have not seen, or are not unlikely to see, any material impact of the geopolitical scenario”
Srikanth Gopalakrishnan, page 8 of the filed PDF · View the filing
Management said ROA depends on leverage as well as spread, guiding to 8.25%-8.5% for FY27 and 8%-8.25% steady state.
Answered by Srikanth Gopalakrishnan
Asked by Suraj Das: How will ROA trend given steady-state credit cost is only modestly lower than current levels?
p. 9
“we should be able to operate at about 8.25% to 8.5% for this year”
Srikanth Gopalakrishnan, page 9 of the filed PDF · View the filing
Management said it was a mix of the collections build-out and Q4 incentive schemes, calling it business as usual.
Answered by Srikanth Gopalakrishnan
Asked by Viral Shah: Was the rise in personal expenses a one-off or a structural cost from the new collections vertical?
p. 9
“it's a combination of both, Viral. One is obviously the build-out of the collections vertical.”
Srikanth Gopalakrishnan, page 9 of the filed PDF · View the filing
Management said over-leverage from unsecured/MFI lending spilled into behavioural issues among customers, prompting separation of business and collection verticals from April 1.
Answered by Lakshmipathy D
Asked by Kunal Thanvi: Why was the business and collections team split, and what structural issues prompted it?
p. 12
“the business vertical and collection vertical has been separated since April 1st, fully functional”
Lakshmipathy D, page 12 of the filed PDF · View the filing
Management guided opex to average AUM at around 7% to 7.25% for the year.
Answered by Srikanth Gopalakrishnan
Asked by Kunal Thanvi: What should steady-state opex to assets be given the reorganization and slower growth?
p. 12
“our sense is, I think it will largely remain around the 7% to 7.25% levels”
Srikanth Gopalakrishnan, page 12 of the filed PDF · View the filing
Management said disbursements will be pushed up regardless, targeting INR6,500-7,000 crores, with NPAs expected to decline as a consequence of improving collections.
Answered by Srikanth Gopalakrishnan
Asked by Yuval Aiya: Is the 20% AUM growth contingent on GNPA improving first, or independent of it?
p. 13
“we should be able to get close to about INR6,500 crores to INR7,000 crores of disbursements in the coming year”
Srikanth Gopalakrishnan, page 13 of the filed PDF · View the filing
Management said 20% is not necessarily the ceiling and could see upside, while pricing has no planned changes.
Answered by Srikanth Gopalakrishnan
Asked by Aravind Ravichandran: Given built capacity, could growth beyond FY27 exceed 20%, and should pricing be revisited given credit cost guidance?
p. 14
“20% is a number that we are confident of achieving, and possibly we could see some upsides coming in, in the years”
Srikanth Gopalakrishnan, page 14 of the filed PDF · View the filing
Management said top-up and repeat combined are about 10-15% of disbursements, digital collections are 84%, and write-offs were about INR160-165 crores for FY26.
Answered by Srikanth Gopalakrishnan
Asked by Shubhranshu Mishra: What proportion of FY26 disbursements came from top-up/repeat customers, and what is the cash collection proportion and write-off?
p. 15
“about 10% to 15% of loans are people who are running multiple loans with Five-Star”
Srikanth Gopalakrishnan, page 15 of the filed PDF · View the filing
Management said fintechs are not seen as competitors given differences in ticket size, tenure, and end-use of loans.
Answered by Lakshmipathy D
Asked by Divyansh Gupta: Does rising digital payment adoption expose Five-Star customers to fintech competition via new banking data footprints?
p. 17
“we never saw fintech as our competitors ever since we have been saying, because they operate for a different working capital in nature”
Lakshmipathy D, page 17 of the filed PDF · View the filing
Management detailed South market recovery, micro-LAP focus before affordable housing expansion, confidence in reaching required disbursement levels, limited near-term cost of funds benefit, and said the RBI ECL floor does not yet apply to NBFCs.
Answered by Srikanth Gopalakrishnan
Asked by Chandrasekhar Sridhar: What is driving geographic growth composition, product diversification plans, disbursement run-rate needed for 20% growth, cost of funds trajectory, and Stage-2 coverage versus RBI norms?
p. 20
“I don't think that 5% is going to come on Stage-2 anytime soon for the NBFCs”
Srikanth Gopalakrishnan, page 20 of the filed PDF · View the filing
Risks flagged
Asset quality headwinds from MFI and unsecured loan over-leverage spilling into secured small-ticket loan portfolios
p. 3
“The asset quality headwinds faced by MFIs and unsecured loans/ unsecured loan lenders over the last couple of years creeped into the portfolios of secured loan lenders also, especially those providing small ticket loans.”
Lakshmipathy D, page 3 of the filed PDF · View the filing
Senior management exit during the year
p. 4
“There was a senior management exit during this year, but I want to clearly lay down the fact this has no impact on our performance.”
Lakshmipathy D, page 4 of the filed PDF · View the filing
Geopolitical and macroeconomic uncertainty creating pressure on borrowing costs and liquidity
p. 20
“given the macroeconomic challenges, the geopolitical challenges, it is creating a little bit of uncertainty in the borrowing space”
Srikanth Gopalakrishnan, page 20 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.