Five-Star Business Finance Set For Long-Term Growth, Says Motilal Oswal Maintaining 'Buy' — Check Target Price

Motilal Oswal expects Five-Star to deliver an AUM CAGR of ~24% and PAT CAGR of ~17% over FY26–28E, with RoA/RoE projected at 6.8% and 16.6% by FY28. At CMP, the stock trades at 1.9x FY27E P/BV, which the brokerage views as attractive given the company's strong fundamentals and long-term growth prospects.

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Motilal Oswal Report

Five-Star Business Finance Ltd. is navigating the current environment with deliberate caution, prioritizing stability, portfolio quality, and organizational readiness over nearterm growth optics.

While FY26 growth is likely to be softer than earlier expectations, the company is laying a robust foundation for sustained compounding as collections normalize, credit filters tighten, and technology driven efficiencies scale.

The stock currently trades at 2x FY27E P/BV.

Motilal Oswal estimates Five Star to deliver an AUM/PAT CAGR of ~24%/17% over FY26-28, along with an RoA/RoE of 6.8%/ 16.6% in FY28E.

The brokerage reiterates a Buy rating on the stock with a target price of Rs 700 (premised on 2.2x Sep' 27E price/book value).

Key risks:

1. further deterioration in the asset quality and

2. a delay in disbursement volume pickup if portfolio stability takes longer to materialize.

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