Q1 2027 Five-Star Business Finance Ltd Earnings Call Transcript
Key Points
- Five-Star Business Finance Ltd (BOM:543663) achieved its historical best in disbursements with INR1,496 crores, marking a 23% growth over the previous quarter.
- The company ended the quarter with an AUM of INR13,722 crores, showing a sequential growth of 4%.
- Collection efficiency remained robust at 97.9%, despite the seasonally soft quarter.
- The company achieved a significant milestone of 500,000 active loan customers as of June 30, 2026.
- The cost of funds decreased from 8.95% in Q4 FY26 to 8.80% in Q1 FY27, maintaining healthy spreads.
- Operating expenses have increased, with the cost to asset ratio rising from 5% to nearly 6%, and are expected to remain elevated for the current year.
- Yield contraction is expected to continue for the next couple of quarters, potentially impacting profitability.
- The company is not expecting significant operating leverage to kick in until FY28.
- Write-offs are projected to remain stable at around INR60 crores per quarter, indicating ongoing asset quality challenges.
- The company faces potential risks from external factors such as energy cost increases and liquidity conditions.
Ladies and gentlemen, good day, and welcome to Five-Star Business Finance Q1 FY27 Earnings Conference Call. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Sanket Chheda from Time Capital. Thank you, and over to you, Mr. Chheda.
A very good morning to all of you. Welcome to Five-Star Q1 earnings call. We have with us the entire management team today Mr. Lakshmipathy Deenadayalan, who is the Chairman and Managing Director. Then we have Mr. Srikanth Gopalakrishnan, who is Joint MD and CFO; and Mr. Prashanth Sreenivasan, the Chief of Strategy and Investor Relations.
Without further ado, I'll hand the call over to Lakshmipathy sir for his opening remarks, and then we will follow that up with question and answers. Over to you, sir.
Yes. Thank you. First of all, let me welcome you all for
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