Buy Five-Star Business Finance, target price Rs 860: ICICI Securities
Five-Star Business Finance, incorporated in the year 1984, is a Large Cap company (having a market cap of Rs 21006.79 Crore) operating in NBFC sector.
Five-Star Business Finance key Products/Revenue Segments include Interest, Fees & Other Charges and Income From Sale Of Share & Securities for the year ending 31-Mar-2022.
Financials For the quarter ended 30-06-2023, the company has reported a Standalone Total Income of Rs 483.57 Crore, up 10.08 % from last quarter Total Income of Rs 439.29 Crore and up 42.62 % from last year same quarter Total Income of Rs 339.06 Crore. Company has reported net profit after tax of Rs 183.71 Crore in latest quarter.
Investment Rationale
Five Star Business Finance’s FY23 annual report provides an insight on how it is progressing towards its vision of “reaching the unreached through suitable credit solution” and capturing the INR 22trn MSME lending opportunity.
AUM growth reviving to 37% in FY23 vs 14% CAGR between FY20-22 (covid impact) is a testimony to its agility and business resiliency. In a high human touch model, adherence to standard-operating-process (SOPs) becomes a prerequisite, and negligible frauds / mishandling of cash in FY23 (and even in previous years) reflects its tight control on processes and staff quality.
Promoter/FII Holdings Promoters held 34.39 per cent stake in the company as of 30-Jun-2023, while FIIs owned 8.74 per cent, DIIs 4.71 per cent.
