Five-Star Business’ FY24 net profit up 39% at ₹836 crore on robust disbursements

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Five-Star Business Finance Ltd, a non-banking finance company, has reported a 40 per cent increase in its profit after tax (PAT) at ₹236 crore for the quarter ended March 31, 2024, compared with ₹169 crore in the year-ago quarter.

For the full year of FY24, its PAT grew 39 per cent at ₹836 crore (₹604 crore), according to a statement.

In Q4FY24, the total income grew 41 per cent to ₹619 crore, while for FY24, the total income recorded 44 per cent growth at ₹2,195 crore (₹1,529 crore). Net interest income grew to ₹1,730 crore in FY24 (₹1,265 crore).

Disbursements for the March 2024 quarter grew 20 per cent at ₹1,336 crore (₹1,110 crore), while for FY24, disbursements rose a whopping 44 per cent at ₹4,881 crore (₹3,391 crore in H1FY23).

Strong momentum

“Q4 was a very strong quarter across the three aspects of quality, profitability and growth. Our collection efficiency for the quarter was at 99.5 per cent and unique customer collections came in at 97.8 per cent, both of which were better than the numbers recorded for Q3-FY24. Our gross NPA also dropped from 1.40 per cent in Q3-FY24 to 1.38 per cent in Q4-FY24. We are very confident of continuing our strong momentum in the coming financial year as well,” said D Lakshmipathy, Chairman and Managing Director.

The gross stage 3 assets ratio stood at 1.38 per cent as of March 31, 2024 (1.36 per cent), while net stage 3 assets dropped to 0.63 per cent (0.69 per cent).

The assets under management grew 39 per cent to ₹9,641 crore as of March 31, 2024.

It added 40 branches during Q4-FY24, taking the total number of branches to 520.

In the March 2024 quarter, Five-Star raised incremental debt sanctions of ₹900 crore availing ₹950 crore (inclusive of some unavailed sanctions from previous quarters). It obtained a large-ticket sanction from NABARD. IFC subscribed to the company’s NCDs in April 2024 for a quantum of ₹500 crore.

“We are progressing well on our intent to diversify our borrowing sources. Our cost of incremental debt remained almost the same as Q3FY24 and we were able to avail fresh funding at 9.58 per cent during the quarter. The cost of funds on the book also remained flattish at 9.64 per cent for the quarter. We continue to have robust liquidity on the balance sheet of ₹1,879 crore along with unavailed sanctions of ₹425 crore,” said Lakshmipathy.