Five-Star Business Finance Limited (FIVESTAR) AI Stock Analysis

Company Guidance

Management expects to “cross our growth guidance for this year very comfortably” and “comfortably cross our AUM guidance”; slippages and credit cost are expected to be “flattish” for the rest of the year, with slippages “at around the 70 basis point levels” for the next couple of quarters, while gross Stage 3 assets may see a “marginal gradual drop over the next couple of quarters” and GNPA ratios are expected to improve in FY 2028. Incremental borrowing costs are expected at “870-875” in the second half, with cost of funds on the book “12-15 basis points” higher by the end of FY 2027, potentially reaching “more around an 890 kind of a number”; the “1%” incremental yield is expected to be absorbed over “eight quarters or so” and a large part to come in over “24-36 months.” OpEx is expected to trend down by “50-75 basis points” over the next couple of years to “somewhere between 6.75%-7%,” October disbursements are expected to be “somewhere around INR 550 crores,” and November and December are expected to “get to a good growth number over the previous quarter”; the target ticket-size mix remains 25% sub INR 3 lakhs, 50% INR 3 lakh-INR 5 lakhs, and 25% INR 5 +lakh, while full-year NPA resolution is expected to “cross INR 100 crores” and recoveries on write-offs are expected more from FY 2028 and FY 2029 onwards.