Shares of Five-Star Business Finance Ltd. rose the most in over two months on Thursday after CareEdge hiked the company's credit ratings to 'AA-' with a stable outlook.
The rating agency upgraded its rating for the long-term bank facilities of the company from 'A+' with a stable outlook, as per a June 8 press release.
Ratings for short-term bank facilities as well as commercial paper were reaffirmed at A1+.
Improvement in market capitalisation levels, which stood at Rs 4,285 at the end of the previous fiscal year.
Gross loan portfolio growth of 36.47% year-on-year at Rs 6,915 crore.
Improvement in scale of operations and geographical diversification.
The risk to the above ratings includes a sustained gross net profit ratio of over 4% with weak delinquency levels and a return on total assets of below 3% on a sustained basis with a decline in profitability.
However, CareEdge expects profitability to remain healthy over the medium term, with higher spreads and under-controlled credit costs.
Shares of Five-Star Business Finance rose 2.92% to Rs 600 apiece, compared to a flat Nifty 50 as of 11:52 a.m. The stock rose over 6.52% intraday, the most in over two months since March 31.
The average traded volume so far in the day stood at 45.1 times its monthly average.
Of the three analysts tracking the company, all three maintained a 'buy' rating, according to Bloomberg data. The average 12-month consensus target price implies a potential upside of 16.9%.
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