The share price of Five-Star Business Finance increased nearly 7% on Monday after global brokerage firm Nomura initiated coverage on the stock. The stock price jumped as much as 6.96% to an intraday high of ₹643.05 apiece on the BSE.
Nomura initiated coverage on the stock with a Buy rating and target price of ₹750 per share, implying an upside of over 16% from today’s high.
The Japanese brokerage house believes that Five-Star Business Finance is uniquely positioned with superior growth and best-in-class profitability among financial peers.
It clocked an assets under management (AUM) CAGR of 47% over FY18-23, with an average ticket size of ₹3 lakh.
Five Star Business Finance reported impressive results with a 37% YoY growth in AUM, in the fourth quarter ending March 2023. Growth in AUM, at ₹6,915 crore, was primarily driven by a 72% YoY increase in loan disbursals due to branch expansion and a rise in the average ticket size of loans.
The company’s net profit during Q4FY23 rose 43% from ₹118 crore in the corresponding quarter of the previous year to ₹169 crore.
Five Star Business Finance have increased to nearly 43% from its listing on 22nd November 2022, with its shares having regrouped 20% in the last three months.
At 10:00 am, the shares of Five Star Business Finance were trading 5.31% higher at ₹633.05 apiece on the BSE.
Five Star Business Finance, based in Chennai provides Small Business loans and Small Mortgage loans to eligible borrowers to meet their business and personal needs, after due underwriting of their cashflows and backed by the collateral of their house property.
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