Five-Star Business Finance (FIVESTAR) Q2 25/26 earnings summary

Executive summary

• Q2 marked stabilization after a challenging Q1, with early recovery signs and expectations for stronger H2 performance; AUM grew 18% YoY to ₹128,471 Mn as of Sep 30, 2025, and 33 new branches were added, totaling 800.

• Loan disbursements for Q2FY26 were ₹11,959 Mn, down 4% YoY; active loans reached 0.49 Mn.

• Profit after tax for Q2FY26 rose 7% YoY to ₹2,861 Mn; return on equity at 16.91%; net interest margin for Q2FY26 was 16.41%; return on assets at 7.49%.

• Unaudited financial results for the quarter and half year ended September 30, 2025, were approved with an unmodified review report from auditors.

• The company operates as a systemically important non-deposit taking NBFC, with a single business and geographic segment in India.

Financial highlights

• Total income for Q2 FY26 was ₹80,650.23 lakh, up from ₹70,584.12 lakh in Q2 FY25; H1 FY26 total income was ₹1,59,768.97 lakh, up from ₹1,37,522.23 lakh YoY.

• PAT for Q2 was INR 286 crore, up 7% sequentially from Q1; net total income for Q2FY26 increased 15% YoY to ₹6,265 Mn.

• Pre-provision operating profit (PPOP) for Q2FY26 was ₹4,329 Mn, up 14% YoY.

• Cost to income ratio (including credit cost) rose to 39.17% from 34.18% in Q2FY25.

• Capital adequacy ratio remained strong at 51.04%.

Outlook and guidance

• Management reaffirmed FY 2026 AUM growth guidance of 25% and credit cost guidance of 1.25%-1.35% of total assets.

• No change in guidance for growth, profitability, asset quality, or credit cost for FY 2026; FY 2027 guidance to be provided later.

• Focus on expanding branch network and increasing average ticket size to drive future growth.

• Expectation of improved disbursements and asset growth in Q3 and Q4 as operational changes take effect.

• Liquidity coverage ratio remains robust at 350% as of September 30, 2025.