{"id":178280,"date":"2026-01-29T01:36:40","date_gmt":"2026-01-29T06:36:40","guid":{"rendered":"https:\/\/alphastreet.com\/india\/?p=178280"},"modified":"2026-01-29T01:36:40","modified_gmt":"2026-01-29T06:36:40","slug":"five-star-business-finance-posts-steady-q3-profit-as-asset-quality-pressures-temper-margins","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/five-star-business-finance-posts-steady-q3-profit-as-asset-quality-pressures-temper-margins\/","title":{"rendered":"Five-Star Business Finance posts steady Q3 profit as asset quality pressures temper margins"},"content":{"rendered":"\n<p>Five-Star Business Finance Ltd (NSE:FIVESTAR), a non-bank lender focused on secured loans to small business owners and self-employed borrowers, reported largely stable earnings for the December quarter, as portfolio growth and higher income offset rising credit costs and softer profitability ratios.<\/p>\n\n\n\n<p>The Chennai-based lender posted a profit after tax of \u20b92.77 billion for the third quarter ended December 31, 2025, up 1% from a year earlier, according to its investor presentation. Net interest income rose 13% year-on-year to \u20b96.34 billion, supported by growth in the loan book and steady yields.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Quarterly Performance-3Q 2026<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Five-Star&#8217;s loan portfolio stood at \u20b9129.6 billion at the end of the quarter, marking a 16% increase from the same period last year. Disbursements during the quarter were \u20b99.76 billion, broadly in line with the prior year.<\/li>\n\n\n\n<li>Total income rose 12% to \u20b98.22 billion, while operating expenses increased 21%, reflecting branch expansion and higher staffing levels.<\/li>\n\n\n\n<li>Credit costs climbed sharply, with loan losses and provisions rising to \u20b9571 million from \u20b9233 million a year earlier. As a result, return on assets declined to 7.0% from 8.1%, while return on equity eased to 15.8% from 18.5% in the year-ago quarter.<\/li>\n\n\n\n<li>Net interest margin moderated to 16.04%.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Nine-month Context \u2013 9M 2026<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>For the first nine months of FY2026, Five-Star reported a profit of \u20b98.30 billion, up 5% year-on-year.<\/li>\n\n\n\n<li>Net interest income for the period increased 16% to \u20b918.64 billion, while the loan portfolio expanded 16% from the previous year.<\/li>\n\n\n\n<li>Profitability ratios softened over the nine-month period, with return on assets at 7.26% and return on equity at 16.41%, reflecting elevated provisioning.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"585\" src=\"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/FiveStar_FY26_OnePage_Infographic-1024x585.png\" alt=\"\" class=\"wp-image-178282\" srcset=\"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/FiveStar_FY26_OnePage_Infographic-1024x585.png 1024w, https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/FiveStar_FY26_OnePage_Infographic-300x171.png 300w, https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/FiveStar_FY26_OnePage_Infographic-768x439.png 768w, https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/FiveStar_FY26_OnePage_Infographic-1536x878.png 1536w, https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/FiveStar_FY26_OnePage_Infographic-2048x1170.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Business &amp; Operations Update<\/strong><\/h2>\n\n\n\n<p>Five-Star continued to scale its physical footprint, adding 35 branches during the quarter to take the total to 835 across 11 states and union territories. The company had 491,782 live loan accounts as of December 2025 and a fully secured loan book, primarily backed by self-occupied residential property.<\/p>\n\n\n\n<p>Average loan-to-value stood at about 39.5%. Collections efficiency remained stable at 96.6% during the quarter. However, asset quality indicators showed stress, with gross Stage-3 assets rising to 3.18% from 1.62% a year earlier, while net Stage-3 assets increased to 1.94%. Stage-2 assets accounted for 9.63% of the portfolio.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Funding &amp; Capital<\/strong><\/h2>\n\n\n\n<p>The lender maintained a strong capital position, with a capital adequacy ratio of 51.63%. During the quarter, it secured incremental debt sanctions of \u20b912.25 billion and availed \u20b94.6 billion at a weighted average cost of about 8.1%. The company also signed a $100 million loan agreement with the Asian Development Bank, strengthening its long-term funding profile.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Investor Sentiment &amp; Outlook<\/strong><\/h2>\n\n\n\n<p>Five-Star&#8217;s shares are widely held by institutional investors, including Fidelity, HDFC Mutual Fund and Nomura Asset Management. While near-term profitability has come under pressure from higher credit costs, the company\u2019s consistent portfolio growth, secured lending model and strong capital buffer are likely to support investor confidence. <\/p>\n\n\n\n<p>Management said it remains focused on calibrated expansion, asset quality management and deepening penetration in under-served small business segments, positioning the lender for sustainable growth over the medium term.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Five-Star Business Finance Ltd (NSE:FIVESTAR), a non-bank lender focused on secured loans to small business owners and self-employed borrowers, reported largely stable earnings for the December quarter, as portfolio growth and higher income offset rising credit costs and softer profitability ratios. The Chennai-based lender posted a profit after tax of \u20b92.77 billion for the third [&hellip;]<\/p>\n","protected":false},"author":2378,"featured_media":125269,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[5,1941,392,1,85],"tags":[151,8265,14984],"class_list":["post-178280","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest","category-stock-analysis","category-earnings","category-finance-stocks","category-retail-stocks","tag-banking","tag-finance","tag-small-business"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2021\/10\/Earnings-Coverage.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":178345,"url":"https:\/\/alphastreet.com\/india\/five-star-business-finance-reports-16-portfolio-growth-in-q3-fy2026-amid-regional-expansion\/","url_meta":{"origin":178280,"position":0},"title":"Five-Star Business Finance Reports 16% Portfolio Growth in Q3 FY2026 Amid Regional Expansion","author":"Staff Correspondent","date":"January 29, 2026","format":false,"excerpt":"Five-Star Business Finance Limited (NSE: FIVESTAR, BSE: 543663), a leading Indian specialized lender, reported a 16% year-on-year increase in its loan portfolio for the quarter ended December 31, 2025, reaching \u20b9129,641 million. The company, which focuses on providing secured financial solutions to small business owners and self-employed individuals, continues to\u2026","rel":"","context":"In &quot;LATEST&quot;","block_context":{"text":"LATEST","link":"https:\/\/alphastreet.com\/india\/category\/latest\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":179038,"url":"https:\/\/alphastreet.com\/india\/lic-housing-finance-q3-earnings-largely-in-line-asset-quality-trends-improve\/","url_meta":{"origin":178280,"position":1},"title":"LIC Housing Finance Q3 Earnings Largely In Line; Asset Quality Trends Improve","author":"Staff Correspondent","date":"February 2, 2026","format":false,"excerpt":"LIC Housing Finance Limited (NSE: LICHSGFIN) on Friday reported a slight year-on-year decline in net profit for the third quarter ended December 31, 2025, as the mortgage lender navigated a landscape of stabilizing interest rates and rising competition. 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Strong momentum across all lines of businesses with secular AUM growth in the first half. Confident of strong FY23.\u201d- Management, Bajaj Finance Ltd. Bajaj Finance Ltd. reported its highest ever net profit for the June\u2026","rel":"","context":"In &quot;Earnings&quot;","block_context":{"text":"Earnings","link":"https:\/\/alphastreet.com\/india\/category\/earnings\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/iStock-108274999.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/iStock-108274999.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/iStock-108274999.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":179167,"url":"https:\/\/alphastreet.com\/india\/bajaj-housing-finance-q3-profit-jumps-21-on-robust-loan-demand\/","url_meta":{"origin":178280,"position":4},"title":"Bajaj Housing Finance Q3 profit jumps 21% on robust loan demand","author":"Staff Correspondent","date":"February 2, 2026","format":false,"excerpt":"Bajaj Housing Finance Ltd (BSE: 544252; BAJAJHFL) reported a 21% rise in third-quarter profit on Monday, driven by double-digit growth in its assets under management and strong disbursement momentum despite a competitive lending environment. 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Financial performance For the third quarter of FY26, Repco\u2026","rel":"","context":"In &quot;LATEST&quot;","block_context":{"text":"LATEST","link":"https:\/\/alphastreet.com\/india\/category\/latest\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/10\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/10\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/10\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/178280","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/users\/2378"}],"replies":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/comments?post=178280"}],"version-history":[{"count":2,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/178280\/revisions"}],"predecessor-version":[{"id":178283,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/178280\/revisions\/178283"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media\/125269"}],"wp:attachment":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media?parent=178280"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/categories?post=178280"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/tags?post=178280"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}