Q1FY25 Results Five Star Business Finance Limited

Chennai, July 31, 2024: The Board of Directors of Five-Star Business Finance Limited, has declared its unaudited financial results for the quarter that ended June 30, 2024.

This is a very special quarter for Five Star as we touched the 5-digit AUM for the first time – we crossed the AUM of 10,000 Crores in this quarter. Five Star continues its journey of strategic and execution excellence which is reflected across the various verticals – business, credit, collections, fundraising, technology, risk management, etc.

Barring the marginal impact of heat and elections, the quarter saw robust momentum across various aspects. During this quarter, we disbursed Rs 1,318 Crores of loans which is almost flat to the previous quarter. On a Y-o-Y basis, we registered a disbursement growth of 16%. We added 27 branches during Q1FY2025, leading to a strong branch network of 547 branches across 9 states and 1 union territory.

On the collections front, we saw a good set of numbers for Q1. We had a collection efficiency of 98.5% and unique customer collections came in at 97.2%. There was a marginal increase in gross NPA by 3 bps from 1.38% in Q4FY24 to 1.41% and in 30+ by 22 bps from 7.89% in Q4FY24 to 8.11% being a typical Q1 phenomenon.

During the quarter, we also raised incremental debt sanctions of Rs 850 Cr availing Rs 825 Cr. We were able to obtain a large ticket sanction from IFC, one of the largest DFI across the globe. IFC subscribed to our NCDs for a quantum of INR 500 Cr. We are progressing well on our intent to diversify our borrowing sources with the proportion of our borrowing from banks dropping from 84% as of June’23 to 74% as of June’24. The cost of funds on the book has almost remained flat at 9.65% for the quarter. We continue to have robust liquidity on the balance sheet of Rs 1,891 Cr along with unveiled sanctions of Rs 400 Cr.

We continued to grow consistently and delivered an AUM growth of 36% y-o-y. PAT for Q1FY25 grew at 37% as compared to Q1FY24, with one of the best ROA and ROE ratios.

Key Highlights for Q1FY25:

Distribution:

1. The Company has increased its branch presence to 547 branches across 10 states / UT.
2. During the quarter, the company opened 27 new branches.
3. Disbursals – The Company disbursed an amount of Rs 1,318 Cr, up by 16% on a y-o-y basis and marginally down by 1% on a q-o-q basis.

Assets under Management:

1. AUM as of June 30, 2024, ended at Rs 10,344 Cr, a growth of 36% on a y-o-y basis and 7% on a q-o-q basis.
2. AUM is well distributed across 0.41 mn active loans

Collections & Asset Quality:

1. Collection efficiency for the quarter stood at 98.5%. Unique customer collection efficiency for the quarter stood at 97.2%.
2. 30+ DPD ended at 8.11% as of June 30, 2024.

Provisions:

1. ECL provision carried on books was 170 Cr, which translates to 1.63% of the overall AUM.
2. Stage 3 provision was at 76 Cr leading to a provision coverage ratio on stage 3 assets of 52.08%

Borrowings:

1. Total borrowings including debt securities are at Rs 6,724 Cr as of June’24.
2. The company continues to carry a liquidity of Rs 1,891 Cr as of June’24.
3. The cost of incremental debt during the quarter was 9.47% which improved by 11 bp on a q-o-q basis.
4. The cost of funds on the overall borrowing books was at 9.65%, up by 1 bps on a q-o-q basis.

Financial Performance for the quarter:

1. Total income of Rs. 669 Cr; y-o-y growth of 38%
2. PBT of Rs.336 Cr; y-o-y growth of 37%
3. PAT of Rs.252 Cr; y-o-y growth of 37%
4. ROA at 8.23%; q-o-q decrease of 20 bps and y-o-y decrease of 18 bps.
5. ROE at 18.95%; q-o-q increase of 30 bps and y-o-y increase of 233 bps.