Five-Star Business Finance Ltd Q4 FY26 Results

FY2025-26 will go down as one of the most challenging years for Five Star. The asset quality headwinds faced by MFIs and unsecured loan lenders over the last couple of years creeped into the portfolios of secured loans lenders, especially those providing small ticket loans. As a Company providing loans to small business owners and self- employed individuals, with a higher proportion of MFI overlap, this resulted in increased DPDs and NPA for Five Star during the course of this financial year; however the actions taken by us over the last few quarters have helped us tide over these challenges and I am very happy to state that the worst is behind us and the coming quarters will see us moving in one direction i.e. “Onwards and Upwards”. The current quarter has been very encouraging with collection efficiencies across buckets showing excellent improvements and getting back to robust levels. I want to share few collection metrics that clearly show this trend: 1. For the quarter ended March 31, 2026, we clocked a unique customer collection efficiency (excluding NPA loans) of 98.1%, which is the one of the best in the history of the Company. 2. Our x-bucket collections for the quarter came in at 99.3%, which has helped contain forward flows from x-bucket. 3. Our slippage ratio (defined as increase in NPAs + write offs as a % of the opening standard AUM) has dropped from 1.09% in Q3FY26 to 0.70% in Q4FY26. This has helped our NPA remain largely stable between quarters at 3.37% for Q4FY26. 4. Credit cost has remained largely stable at 1.88% of average AUM for Q4FY26 compared to 1.76% for Q3FY26. 5. After quarters of continued drop, the current proportion of our portfolio has moved up almost by a percentage point, from 81.77% in Q3FY26 to 82.69% in Q4FY26. With our collections strategies in place and our collection efforts showing strong traction, we started to refocus on disbursements and portfolio growth during the current quarter. While our full year disbursement of ₹4,676 Cr was slightly short compared to the previous year, our disbursement for the quarter came in at ₹1,213 Cr, an increase of 24% over the previous quarter. The trends across collections, disbursements and asset quality are clear and we will continue to build on the progress that we have made during the year, in the coming quarters and years. As I had stated post our Q3 results, we were in the process of building a full-fledged collection vertical, right up to senior people at HO, and I am happy to state that this has gone fully operational starting from Q1FY27, and this would have a positive impact on collections and asset quality. My sincere gratitude goes out to all our lenders who continued to support us during the current financial year. During the quarter ended March 31, 2026, we availed incremental debt of ₹928 Cr at an all-inclusive cost of 8.53%. The funding of $100 Mn provided by Asian Development Bank, one of the largest developmental financial institutions across the globe, is a shot in the arm and we are hopeful that they would continue to support us in our endeavour to make funds a