Five Star Business Services' net profit jumped 43.55% to Rs 216.76 crore in Q3 FY24 as against Rs 151 crore posted in Q3 FY23.
Total income increased 46.64% year on year (YoY) to Rs 570.02 crore in the quarter ended 31 December 2023.The company's profit before tax stood at Rs 289.91 crore, up 43.86% year on year (YoY) from Rs 201.52 crore posted in Q3 FY23.
Net interest income (NII) rose 36% YoY to Rs 441.3 crore during the third quarter of FY24. Net interest margin (NIM) stood at 16.80% for Q3 FY24 as against 18.55% posted in Q3 FY23.
Disbursement during the quarter stood at Rs 1,208.9 crore, registering a growth of 32.8% YoY.
Loan losses & Provisions amounted to Rs 102 crore in Q3 FY24 as against Rs 47 crore in Q3 FY23.
Overall Stage 2 assets stood at Rs 620.8 crore (6.95%) as of 31 December 2023 as against Rs 664.8 crore (10.65%) as of 31 December 2022.
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Gross & Net Stage assets stood at 1.40% and 0.65% respectively as of 31 December 2023 as against 1.45% and 0.81% as of 31 December 2022.
The provision coverage on Stage-3 assets stood at 54.26% and the provision coverage on the overall portfolio stood at 1.62%.
The AUM jumped 43% to Rs 8,930.8 crore as on 31 December 2023 as against Rs 6,242.4 crore as of 31 December 2022.
Active loans was at 0.36 million as against 0.27 million as of 31 December 2023. Collection efficiency for the quarter was at 99.1%.
During Q3 FY24, the company has received sanctions for incremental debt of Rs 1,380 crore availing Rs 1,005 crore at a weighted average interest rate of 9.31% (all-inclusive cost of 9.57%). Liquidity buffer as of 31 December 2023 stood at about Rs 1,799.1 crore.
Capital adequacy remained high at 53.26% as on 31 December 2023.
Lakshmipathy Deenadayalan, chairman & managing director, said, We had a strong quarter in Q3 across business and disbursal demand and collections momentum. Despite some minimal impact of floods, we disbursed Rs 1,209 crore of loans as against Rs 1,204 crore during Q2 FY24. We added 24 branches during Q3 FY24, following the 70 branches we added during Q2 FY24. This has resulted in a strong branch network of 480 branches to deliver quality service to our customers.
On the collections front, we saw a good set of numbers, a bit muted due to the impact of floods across 2 key states of TN and AP. While there was a marginal increase in our gross NPA from 1.35% in Q2 FY24 to 1.40% during the current quarter, our 30+ came down from 8.59% last quarter to 8.35% during the current quarter.
During the quarter, we also raised incremental debt sanctions of Rs 1,380 crore availing Rs 1,005 crore. We continue to have a robust liquidity on the balance sheet of Rs 1,799 crore and also unavailed sanctions of Rs 475 crore. While the cost of incremental debt showed a slight increase to 9.57% as against 9.50% for Q2 FY24, the cost of funds on the book showed a drop from 9.71% in Q2 FY24 to 9.64% during the current quarter.
We continued to grow consistently and delivered an AUM growth of 43% YoY. PAT for Q3 FY24 grew at 44% as compared to Q3 FY23 and our ROA and ROE stand as one of the best in the industry.
Five-Star Business Finance is a non-banking finance company. The company primarily offers small loans for business purposes, asset creation and other economic purposes to micro-entrepreneurs and self employed individuals after due underwriting of their cashflows and backed by the collateral of their house property.
It has a network of 480 branches catering to around 360,000 active live accounts in Tamil Nadu (including the Union Territory of Puducherry), Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh, Maharashtra, Uttar Pradesh Chhattisgarh and Rajasthan.
Shares of Five Star Business Finance fell 0.35% to currently trade at Rs 290.30 on the BSE.
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