Five-Star Business Finance (FIVESTAR) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 was a muted quarter with lower growth and asset quality challenges due to over-leveraging among small-ticket borrowers, especially in certain geographies.

• AUM grew 20% year-over-year to ₹124,578 Mn as of June 30, 2025, with net quarterly growth of ₹5,808 Mn.

• CEO Ranga Krishnan is stepping down, but operational continuity is assured with a strong second-line management and the Chairman taking direct charge.

• Branch network expanded to 767, adding 19 branches in the quarter.

• Unaudited financial results for the quarter ended June 30, 2025, were approved with an unmodified review report from statutory auditors, confirming compliance with SEBI LODR regulations.

Financial highlights

• Profit after tax for the quarter was ₹2,663 Mn, up 6% year-over-year but down sequentially due to higher credit costs.

• Total income for Q1 FY26 was ₹79,118.74 lakh, up from ₹66,938.11 lakh year-over-year.

• Net total income grew 18% year-over-year to ₹6,039 Mn.

• Cost to income ratio (including credit cost) increased to 41.34% from 34.34% in Q1FY25.

• Net Interest Margin for Q1FY26 was 16.43%.

Outlook and guidance

• Growth and profit guidance for FY26 remains unchanged at 25% AUM growth and 12%-15% profit growth.

• Credit cost guidance revised upward to 1.2% for the full year, reflecting current stress levels.

• Strategy focuses on expanding branch network, increasing average ticket size, and robust risk management.