Five Star Business Q3 Results Review — Motilal Oswal Retains 'Buy' On The Stock, Sees 25% Upside - Here's Why

Five Star Finance’s asset quality is expected to remain relatively resilient compared to the stress that is witnessed in the unsecured lending segment..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Five Star Business Finance Ltd. reported a weak business momentum in Q3 FY25. The company reported AUM growth of ~25% YoY, in line with its guidance to moderate growth momentum given the current weak macro environment and overleverage from unsecured retail. Interestingly, while asset quality deteriorated with GS3 rising ~15 bp QoQ due to a minor sequential decline in collection efficiency, credit costs remained broadly stable QoQ at ~70 bp.The stock currently trades at 2.4 times FY27E price/book value. We believe that Five Star Finance’s premium valuations will remain intact, given its niche market position, superior underwriting practices, resilient asset quality, and (still) high return metrics.We estimate Five Star Finance to deliver a ~26% AUM CAGR over FY24-FY27, along with net interest margin (as a % of average loans) of 18.3%/17.1% in FY26/FY27E. Five Star Finance’s asset quality is expected to remain relatively resilient compared to the stress that is witnessed in the unsecured lending segment. We reiterate our Buy rating on the stock with a target price of Rs 930 (premised on 3.3x Sep’26E book value per share)..Click on the attachment to read the full report:.Budget 2025 & Share Market Impact - Motilal Oswal Bets On These Top Large, Mid And Smallcap Stocks .DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Five Star Business Q3 Results Review — Motilal Oswal Retains 'Buy' On The Stock, Sees 25% Upside - Here's Why

The brokerage believes Five Star’s premium valuations will remain intact, given its niche market position, superior underwriting practices, resilient asset quality, and (still) high return metrics.

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