Conference Call with Five-Star Business Finance Management and Analysts on Q1FY25 Performance and Outlook. Listen to the full earnings transcript.
Finance company Five-Star Business Finance announced Q1FY25 results: Financial Highlights: Total income of Rs 669 crore; YoY growth of 38% PBT of Rs.336 crore; YoY growth of 37% PAT of Rs.252 crore; YoY growth of 37% ROA at 8.23%; QoQ decroreease of 20 bps and YoY decroreease of 18 bps. ROE at 18.95%; QoQ incroreease of 30 bps and YoY incroreease of 233 bps. Business Highlights: Distribution: The Company has incroreeased its branch presence to 547 branches acroreoss 10 states / UT. During the quarter, the company opened 27 new branches. Disbursals – The Company disbursed an amount of Rs 1,318 crore, up by 16% on YoY basis and marginally down by 1% on QoQ basis. Assets under Management: AUM as of June 30, 2024 ended at Rs 10,344 crore, growth of 36% on YoY basis and 7% on QoQ basis. AUM is well distributed acroreoss 0.41 million active loans Collections & Asset Quality: Collection efficiency for the quarter stood at 98.5%. Unique customer collection efficiency for the quarter stood at 97.2%. 30+ DPD ended at 8.11% as of June 30, 2024. Provisions: ECL provision carried on books was 170 crore, which translates to 1.63% of the overall AUM. Stage 3 provision was at 76 crore leading to a provision coverage ratio on stage 3 assets of 52.08% Borrowings: Total borrowings including debt securities are at Rs 6,724 crore as on June’24. The company continues to carry a liquidity of Rs 1,891 crore as on June’24. Cost of incroreemental debt during the quarter was 9.47% which improved by 11 bp on QoQ basis. Cost of funds on overall borrowing book was at 9.65%, up by 1 bps on QoQ basis. Commenting on the results, Lakshmipathy Deenadayalan, Chairman & Managing Director, said, This is a very special quarter for Five Star as we touched the 5-digit AUM for the first time – we croreossed the AUM of 10,000 croreores in this quarter. Five Star continues its journey of strategic and execution excellence which is reflected acroreoss the various verticals – business, croreedit, collections, fundraising, technology, risk management, etc. Barring marginal impact of heat and elections, the quarter saw robust momentum acroreoss various aspects. During this quarter, we disbursed Rs 1,318 croreores of loans which is almost flat to the previous quarter. On a YoY basis, we registered a disbursement growth of 16%. We added 27 branches during Q1FY2025, leading to a strong branch network of 547 branches acroreoss 9 states and 1 union territory. On the collections front, we saw a good set of numbers for Q1. We had a collection efficiency of 98.5% and unique customer collections came in at 97.2%. There was a marginal incroreease in gross NPA by 3 bps from 1.38% in Q4FY24 to 1.41% and in 30+ by 22 bps from 7.89% in Q4FY24 to 8.11% being a typical Q1 phenomenon. During the quarter, we also raised incroreemental debt sanctions of Rs 850 crore availing Rs 825 crore. We were able to obtain a large ticket sanction from IFC, one of the largest DFI acroreoss the globe. IFC subscroreibed to our NCDs for a quantum of INR 500 crore. We are progressing well on our intent to diversify our borrowing sources with the proportion of our borrowing from banks dropping from 84% as of June’23 to 74% as of June’24. Cost of funds on the book has almost remained flat at 9.65% for the quarter. We continue to have a robust liquidity on the balance sheet of Rs 1,891 crore along with unavailed sanctions of Rs 400 crore. We continued to growconsistentlyanddeliveredan AUMgrowth of 36%YoY.PAT for Q1FY25grew at 37% as compared to Q1FY24, with one of the best ROA and ROE ratios. Result PDF
Finance company Five-Star Business Finance announced Q4FY24 & FY24 results: Q4FY24 Financial Highlights: Total income of Rs 619 crore; YoY growth of 41%. PBT of Rs 313 crore; YoY growth of 40%. PAT of Rs 236 crore; YoY growth of 40%. ROA at 8.43%; QoQ increase of 18 bps and YoY decrease of 19 bps. ROE at 18.65%; QoQ increase of 91 bps and YoY increase of 255 bps. FY24 Financial Highlights: Total income of Rs 2,195 crore; YoY growth of 44%. PBT of Rs 1,116 crore; YoY growth of 39%. PAT of Rs 836 crore; YoY growth of 39%. ROA at 8.42%; YoY decrease of 20 bps. ROE at 17.60%; YoY increase of 257 bps. Commenting on the results, Lakshmipathy Deenadayalan, Chairman & Managing Director, said, " Q4 was a very strong quarter across the 3 aspects of quality, profitability and growth. During this quarter, we disbursed Rs 1,336 crore of loans as against Rs 1,209 crore during Q3FY24, a sequential growth of ~11%. We added 40 branches during Q4FY24, leading to a strong branch network of 520 branches to deliver quality service to our customers. On the collections front, we saw improvement in numbers on a sequential basis. Our collection efficiency for the quarter was at 99.5% and unique customer collections came in at 97.8%, both of which were better than the numbers recorded for Q3FY24. Our gross NPA also dropped by 2 bps from 1.40% in Q3FY24 to 1.38% during the current quarter; we saw improvement across our DPD buckets with our 30+ coming down from 8.35% last quarter to 7.89% during the current quarter. We are very confident of continuing our strong momentum in the coming financial year as well. During the quarter, we also raised incremental debt sanctions of Rs 900 crore availing Rs 950 crore. We were able to obtain a large ticket sanction from NABARD, on of the largest domestic DFI, at competitive pricing, which would augur well from a diversification perspective. While not in Q4FY24, IFC, one of the largest DFI across the globe, subscribed to our NCDs in the month of April 2024 for a quantum of INR 500 crore. We are progressing well on our intent to diversify our borrowing sources, and all this has come in with no material impact on the allinclusive pricing. Our cost of incremental debt remained almost the same as Q3FY24 and we were able to avail fresh funding at 9.58% during the quarter. Cost of funds on the book also remained flattish at 9.64% for the quarter. We continue to have a robust liquidity on the balance sheet of Rs 1,879 crore along with unavailed sanctions of Rs 425 crore. We continued to grow consistently and delivered an AUM growth of 39% YoY. PAT for Q4FY24 grew at 40% as compared to Q4FY23 and we closed with a full year PAT of 836 crore, with one of the best ROA and ROE ratios." Result PDF
Non-banking Financial company Five-Star Business Finance announced Q2FY24 results: 1. Financial Performance: - AUM increased by 44% YoY and 9% QoQ, reaching Rs 8,264 crores. - Disbursements for the quarter amounted to Rs 1,204 crores, a 50% YoY growth, and Rs 2,336 crores for the half year, a 70% increase compared to the same period last year. - PAT for the quarter stood at Rs 199 crores, a 38% YoY rise, and Rs 383 crores for the half year, a 35% increase compared to the previous year. 2. Asset Quality: - Gross Stage 3 assets (NPA) stood at 1.35% of AUM, while net Stage 3 (NPA reduced by impairment allowance) was 0.68% of AUM. - NPA numbers decreased from the previous quarter, with 30+ DPD reducing from 9.68% to 8.59% during the current quarter. 3. Operational Highlights: - Five-Star Business Finance added 70 branches during Q2FY2024, bringing the total branch network to 456. - Collection efficiency for the quarter was 100.3%, and improvements were seen across various DPD buckets. Commenting on the results, Lakshmipathy Deenadayalan, Chairman & Managing Director, Five-Star Business Finance, said, "Five Star continued to witness strong traction across business and disbursal demand and collections momentum. During the quarter, we disbursed Rs 1,204 Crores of loans as against Rs 1,132 Crores in the sequential quarter and also registered a disbursement growth of 50% on Y-o-Y basis. We added 70 branches during Q2FY2024, our highest ever branch additions in a quarter, resulting in a strong branch network of 456 branches, to deliver quality service to our customers. On the collections front, we saw a strong set of numbers, across the metrics of collections efficiency and 30+ DPD. We had a collection efficiency of 100.3% for the quarter and improvement across the various DPD buckets. We saw a decrease in NPA numbers as compared to the previous quarter (1.35% in Q2FY24 vs 1.41% in Q1FY24), our 30+ came down from 9.68% last quarter to 8.59% during the current quarter. We are very confident that the strong growth in disbursements and collection efficiencies pave the way for a strong trajectory across growth, quality and profitability. We continued to grow consistently and delivered an AUM growth of 44% Year on Year. PAT for Q2FY2024 has grown at 38% as compared to Q2FY2023 and our ROA and ROE stand as one of the best in the industry." Result PDF
Non-banking financial company Five-Star Business Finance announced Q1FY24 results: AUM at Rs 7,583 crore (up 43% YoY and 10% QoQ) Disbursements for the quarter stood at Rs 1,132 crore (up 99% YoY and 2% QoQ) PAT for Q1FY24 at Rs 184 crore (up 32% YoY and 9% QoQ) Gross Stage 3 at 1.411 % and Net Stage 3 at 0.79% Net Interest Margin at 17.74% Return on Assets of 8.41% Return on Equity of 16.62% Networth of Rs 4,527 crore Borrowings from a large base of about 50 lenders Network of 386 branches as on June 30, 2023 Commenting on the results, Lakshmipathy Deenadayalan, Chairman & Managing Director, Five-Star Business Finance, said, "Five Star continued to build on the strong business and disbursal momentum built in Q4FY23. During the quarter, we disbursed Rs 1,132 crore of loans as against Rs 1,110 crore in the previous quarter and also registered a disbursement growth of 99% on a YoY basis. We added 13 branches during Q1FY24 resulting in a strong branch network of 386 branches to deliver quality service to our customers. 7 out of these 13 branches were added in the Rest of India locations (5 in MP, 1 in MH, and 1 in Rajasthan which marks our entry into another new state). The remaining branches were added in locations across the Southern States. Even on the front of the collection, we saw stronger than typical Q1 numbers. We had a collection efficiency of 99.6% for the quarter and improvement across the various DPD buckets. While there was a marginal increase in NPA numbers as compared to the previous quarter (1.41% in Q1FY24 vs 1.36% in Q4FY23), which is a typical Q1 phenomenon. Notably, our 30+ came down from 10.51% last quarter to 9.68% during the current quarter. We are very confident that the strong growth in disbursements and collection efficiencies pave the way for a strong trajectory across growth, quality, and profitability. We continued to grow consistently and delivered an AUM growth of 43% Year on Year. PAT for Q1FY24 has grown at 32% as compared to the previous FY and our ROA and ROE stand as one of the best in the industry. During the quarter, CARE has also upgraded the rating to AA-, which is also a testimony to the company’s strength." Result PDF