Comments
Five-Star Business Finance Ltd recorded a 26 per cent year-on-year increase in its net profit, reaching ₹274 crore for the quarter ended December 31, 2024, compared to ₹217 crore in the same period last year. The growth was driven by higher net interest income.
Total income for Q3FY25 rose 28 per cent to ₹731 crore from ₹570 crore a year earlier, while net interest income increased by 27 per cent to ₹560 crore, up from ₹441 crore.
The company’s Assets Under Management (AUM) grew 25 per cent year-on-year to ₹11,178 crore from ₹8,931 crore. Sequentially, AUM increased by 2 per cent, according to a statement.
Lakshmipathy Deenadayalan, Chairman and Managing Director, pointed out the challenges faced by the financial services sector, particularly small-ticket lenders, due to overleverage and stress in collections.
“The past few quarters have been challenging, especially for small-ticket lenders. Unsecured lenders have experienced significant stress, which persisted in Q3FY25. While Five-Star faced a marginal impact, we remain resilient,” he stated.
During the quarter, the company disbursed ₹941 crore in loans, down from ₹1,251 crore in Q2FY25, aligning with its portfolio growth strategy.
The company expanded its branch network by adding 69 new locations, comprising both fresh branches and splits from existing ones that had grown significantly. This brings Five-Star’s total branch count to 729 across nine states and one union territory.
Gross and Net Stage 3 assets stood at 1.62 per cent and 0.81 per cent as of December 31, 2024, compared to 1.40 per cent and 0.65 per cent a year earlier, reflecting a slight dip in collections.
During Q3FY25, Five-Star secured incremental debt sanctions of ₹1,400 crore, availing of ₹1,045 crore. The company continued to diversify its borrowing sources, securing funding from HDFC Mutual Fund, HSBC Mutual Fund, and SIDBI. This diversification reduced the proportion of bank borrowings from 70 per cent in September 2024 to 65 per cent in December 2024, a significant drop from 84 per cent in December 2023.
The cost of funds remained stable at 9.63 per cent for the quarter. With ₹600 crore in unutilised sanctions and a strong liquidity position of ₹2,145 crore, Five-Star remains well-capitalised for future growth, said the statement.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.