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'Buy' Five Star Business Shares Maintains Motilal Oswal Despite Soft Q2 On Improved Growth Visibility

Despite a moderation in NIM and slightly higher credit costs, Five Star can deliver healthy RoA/RoE of 6.7%/17% in FY28E, says Motilal Oswal.

<div class="paragraphs"><p>Five Star continues to enhance its credit underwriting framework, which is expected to yield visible benefits in the subsequent quarters. (Photo source: Radha Raswe/NDTV Profit)</p></div>
Five Star continues to enhance its credit underwriting framework, which is expected to yield visible benefits in the subsequent quarters. (Photo source: Radha Raswe/NDTV Profit)
Five Star Business Finance’s Q2 FY26 PAT grew 7% YoY to Rs 2.86 billion (in line). PAT in H1 FY26 grew 6% YoY and we expect PAT in H2 FY26 to grow by 15% YoY. NII grew ~15% YoY to Rs 5.9 billion (inline), while PPoP rose ~14% YoY to Rs 4.3 billion (inline).
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