Five-Star Business Finance conducted a conference call on 01 August 2024 to discuss its financial results for the quarter ended June 2024. Lakshmipathy Deenadayalan, CMD of the company addressed the call:

Highlights:

The June 2024 quarter was muted, while the company has crossed the AUM of Rs 10000 crore end June 2024. The disbursements were nearly flat qoq at Rs 1320 crore in Q1FY25.

The company has posted highest quarterly profit of Rs 252 crore in Q1FY2025.

The company is targeting disbursements growth of 25-27%, while expects loan accounts to increase 20-22% in FY2025.

The cost to income ratio is expected at 35-36% for FY2025.

The company would maintain cash and liquid investments position equivalent to 15-17% of the AUM.

The NIM of the company has declined by 45 bps on sequential basis due to increased borrowings.

The company proposes to pass on the benefits reduction in cost of borrowing to customers.

The mix of bank borrowings has eased to 74% from 79% in the previous quarter.

About 65% of the liabilities are on floating rate basis.

About 70% of the bank borrowings are linked to the MCLR and 30% to external benchmark lending rate.

The company expects the Credit Rating upgrade in next 2-3 quarters.

Gross Stage 3 assets ratio rose slightly to 1.41% end June 2024 from 1.38% end March 2024. 

The industry witnessed tough quarter due to elections and heat waves.

The collections have improved and the company expects asset quality to improve ahead.

The proportion of digital collection is improving and the company expects the share of cash collections to decline to 30% by March 2025.

The company has added 27 new branches in Q1FY25 raising the branches to 547 branches end June 2024.

The company intends to reduce the number of employee per branch to 8 from 15 earlier.