Five-Star Business Finance Ltd. Reports Unaudited Q2 and Six-Month Results for September 30, 2024

Chennai, October 30, 2024: The Board of Directors of Five–Star Business Finance Limited, has declared its unaudited financial results for the quarter and six months period ended September 30, 2024.

Commenting on the results, Mr Lakshmipathy Deenadayalan, Chairman & Managing Director, said,We have had a good quarter in Q2, despite some sectoral headwinds, especially those being faced by unsecured lenders. Being a fully secured lending product coupled with strong underwriting and collections methodologies has helped Five–Star come out with a good set of results even during the current quarter.

During this quarter, we disbursed INR 1,251 Crores of loans as against INR 1,318 Crores in Q1FY2025. This is a conscious strategy to moderate our portfolio growth for the full year, leading to a slight drop in disbursements on a Q-o-Q basis. On a Y-o-Y basis, we registered a disbursement growth of 4%. We added 113 branches during Q2FY2025 (a combination of fresh branches and branches that were split from the existing branches which have reached a certain size), leading to a strong branch network of 660 branches across 9 states and 1 union territory.

On the collections front, we saw a good set of numbers for Q2, despite the headwinds mentioned above. Our unique customer collections came in at 97 %, which is a very marginal drop from the previous quarter and we had a total collection efficiency of 98.4%. When viewed from a sectoral context, both are impressive numbers. Consequent to the slight drop in collections, there was also a marginal increase in gross NPA by 6 bps from 1.41% in Q1FY25 to 1.47% and our 30+ as of Q2FY25 stood at 8.44%.

During the quarter, we also raised incremental debt sanctions of INR 420 Cr, though we availed INR 575 Cr including spillovers from some earlier sanctions. Our intent to diversify our borrowing sources got a fillip as we were able to onboard 2 AMCs as lenders to us – Kotak Mutual Fund and Nippon Mutual Fund. Our proportion of borrowing from banks dropped from 74% as of June’24 to 70% as of September’24. On a Y-o-Y basis, the proportion of our borrowing from banks has dropped from 85% in Sep’23 to 70% in Sep’24. Cost of funds on the book has almost remained flat at 9.65% for the quarter. We continue to have a robust liquidity on the balance sheet of INR 1,699 Cr along with unavailed sanctions of INR 245 Cr.