Any current/future new fundraising through debt or equity?

Five-Star Business Finance Limited raised $100 million from Asian Development Bank (ADB) during the quarter, with $50 million already drawn and $50 million available to draw over the next financial year. The cost of funds for this borrowing was slightly higher due to hedging costs. There was incremental debt availed amounting to INR 928 crores during the quarter at an all-inclusive cost of 8.53%. No specific mention of planned future equity fundraises. Management emphasized strong lender confidence, as evidenced by the ADB line and other borrowings. The company is focusing on cost-effective, d

Any current/future capex/capital investment/strategic investment?

The company plans to continue branch expansion with 60 to 75 new branches in the current financial year, focusing on Tier 1 and Tier 2 cities in Maharashtra, Rajasthan, Gujarat, UP, and Chhattisgarh. Earlier, 96 branches were opened in a tough lending period; now a smaller, focused expansion is planned to leverage existing infrastructure. The branch network expansion aims to improve proximity to customers, reduce competition, and strengthen the foundation for growth. No explicit mention of large-scale capital expenditure beyond branch expansion. Investments in the collections vertical have bee

Future growth expectations in sales/revenue/volumes?

The company targets around 20% AUM growth for FY27, aiming to grow from approximately INR13,000 crores to about INR16,000 crores. Management is confident of sustaining 18-20% growth for at least the next two to three years. Pent-up demand and low base effects support this growth outlook. Plans to open 60 to 75 new branches in FY27, focusing on Tier 1 and Tier 2 cities, especially in states like Maharashtra, Rajasthan, Gujarat, UP, and Chhattisgarh. Disbursements are expected to increase to INR6,500 crores - INR7,000 crores in FY27, up from INR5,000 crores last year. Growth targets are consider

Future growth expectations in earnings/operating earnings/profits/EPS?

Management expects AUM growth of around 20% for FY27, with potential to exceed this as confidence improves. Medium-term growth outlook (next 2-3 years) is around 18-20%, with possible upsides beyond 20% if asset quality and credit cost remain strong. Disbursements for FY27 are targeted between INR 6,500 to 7,000 crores, reflecting pent-up demand and focus on quality customers. PAT grew 2% for the full year FY26 despite challenges; strong collections and asset quality improvements expected to support earnings growth. ROA guidance is 8.25%-8.5% for FY27, with steady-state levels around 8

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Five-Star Business Finance LtdQ1 FY26Finance

Five-Star Business Finance Ltd Q1 FY26 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹497P/E: 12.3Market Cap: ₹13.5K CrSector: Finance

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 2

→The company targets around 20% AUM growth for FY27, aiming to grow from approximately INR13,000 crores to about INR16,000 crores.
→Management is confident of sustaining 18-20% growth for at least the next two to three years.
→Pent-up demand and low base effects support this growth outlook.
→Plans to open 60 to 75 new branches in FY27, focusing on Tier 1 and Tier 2 cities, especially in states like Maharashtra, Rajasthan, Gujarat, UP, and Chhattisgarh.
→Disbursements are expected to increase to INR6,500 crores - INR7,000 crores in FY27, up from INR5,000 crores last year.
→Growth targets are considered conservative; there is potential for higher growth if asset quality and credit cost metrics improve.
→The company plans to leverage existing infrastructure built over the last 2-3 years to support growth.

Margin guidance

Category 3

→Management expects AUM growth of around 20% for FY27, with potential to exceed this as confidence improves.
→Medium-term growth outlook (next 2-3 years) is around 18-20%, with possible upsides beyond 20% if asset quality and credit cost remain strong.
→Disbursements for FY27 are targeted between INR 6,500 to 7,000 crores, reflecting pent-up demand and focus on quality customers.
→PAT grew 2% for the full year FY26 despite challenges; strong collections and asset quality improvements expected to support earnings growth.
→ROA guidance is 8.25%-8.5% for FY27, with steady-state levels around 8%-8.25%. ROE remains strong at about 16%.
→Credit cost guided at 1.5%-1.6%, steady-state level, potentially improving with better customer profiles.
→Operating expenses to assets ratio expected to remain stable around 7%-7.25% despite growth and investments.
→Dividend declared at same level as last year, signaling confidence in steady profitability going forward.

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Fundraise plans

→Five-Star Business Finance Limited raised $100 million from Asian Development Bank (ADB) during the quarter, with $50 million already drawn and $50 million available to draw over the next financial year.
→The cost of funds for this borrowing was slightly higher due to hedging costs.
→There was incremental debt availed amounting to INR 928 crores during the quarter at an all-inclusive cost of 8.53%.
→No specific mention of planned future equity fundraises.
→Management emphasized strong lender confidence, as evidenced by the ADB line and other borrowings.
→The company is focusing on cost-effective, diversified funding through debt.
→No explicit plans for new equity fundraising disclosed in this call.

Order book

The provided transcript from Five-Star Business Finance Limited's Q4 FY26 earnings call does not mention any details regarding the current or expected order book or pending orders. The discussion primarily focuses on: - Loan disbursement, growth strategies, and branch expansion plans. - Portfolio composition and ticket sizes (mainly INR 3-5 lakh range). - Asset quality, collection efficiency, and credit costs. - No information on order book, pending orders, or related commercial contracts is included. Therefore, no information about current or expected order book/pending orders is available in this document.

Capex plans

Yes

→The company plans to continue branch expansion with 60 to 75 new branches in the current financial year, focusing on Tier 1 and Tier 2 cities in Maharashtra, Rajasthan, Gujarat, UP, and Chhattisgarh.
→Earlier, 96 branches were opened in a tough lending period; now a smaller, focused expansion is planned to leverage existing infrastructure.
→The branch network expansion aims to improve proximity to customers, reduce competition, and strengthen the foundation for growth.
→No explicit mention of large-scale capital expenditure beyond branch expansion.
→Investments in the collections vertical have been made to improve asset quality and recoveries.
→No specific strategic investments or large capex beyond branch infrastructure and operational costs mentioned in the call.

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