Five-Star Business Finance’s  March Quarter PAT Up 18% on Strong AUM Growth

Growth in the loan book and assets under management helped lift Five-Star Business Finance Ltd.'s net profit by over 18% on year in the March quarter. The non-banking finance company’s bottom line was also supported by a rise in interest income.

Five-Star Business's net profit for the quarter ended 31 March stood at ₹2.79 billion, surpassing analysts' expectations of ₹2.72 billion. The company’s revenue for the quarter grew 22% to ₹7.52 billion, driven by a similar growth in interest income. On a sequential basis, net profit and revenue grew 2% and 3%, respectively.

For the year ended 31 March, the net profit rose 28% to ₹10.72 billion, while revenue grew 30% to ₹28.48 billion.

Assets under management of the lender grew 23% on year to ₹118.77 billion at the end of March. Disbursements during the quarter rose 9% on year to ₹14.60 billion.

The net interest income of the lender rose 21% on year to ₹5.84 billion in January-March. Total income during the quarter rose 23% on year to ₹7.60 billion. The lender's net interest margin increased by 28 basis points on quarter to 16.8% in January-March.

Gross stage-3 assets of the company stood at 1.8% as of the end of March, while net stage-3 assets were at 0.9%. The provision coverage ratio for stage-3 loans stood at 51.3%, and for the overall portfolio, it was at 1.6%.

The board of the non-bank financier also recommended a final dividend of ₹2 per share for the financial year ended 31 March.