Five-Star Business Finance Ltd.Asset Quality Recovery Underway

Five-Star Business Finance reported stable performance in Q3 FY26 with PAT at ₹277 crore, up 1% year-on-year, while nine-month PAT grew 5% to ₹830 crore.

The company is in the final stages of addressing asset quality challenges, showing early signs of recovery with current portfolio proportion improving to 81.77% and current book collection efficiency strengthening to 99.01% from 98.5%. Management deliberately slowed disbursements by 18% quarter-on-quarter to ₹976 crore to prioritize collection stabilization. Stage-2 additions remained at their lowest levels in recent quarters.

The company enhanced collection infrastructure by adding 84% more collection officers year-on-year to 2,452 and secured a $100 million facility from Asian Development Bank. Despite credit cost pressures at 1.44%, ROE remained healthy at 15.8% and net worth crossed ₹7,000 crore. Management emphasized a long-term approach to preserving credit culture rather than aggressive write-offs, expressing confidence in returning to growth trajectory within the next few quarters once collections stabilize fully.