NBFC Stock with Strong Fundamentals: FIIs Increase Stake by Over 40% in Q2

NBFC Stock with Strong Fundamentals: A company deemed to be ‘fundamentally strong’ exhibits specific characteristics, including robust and consistent financials, lower leverage ratios, and more. One such example is Five-Star Business Finance Limited, an NBFC (Non-Banking Financial Company), where Foreign Institutional Investors (FIIs) have increased their stake by over 40 percent.

Five-Star Business Finance Limited

 

With a market capitalization of Rs 22,963.96 crores, saw its stocks close at Rs 785.85 on Friday, experiencing a marginal decline of around 2.30 percent compared to the previous closing at Rs 804 apiece.

A glance at the company’s financials reveals positive indicators, with operating revenues and after-tax profits consistently on the rise. Operating revenues recently increased from Rs 1,254.06 crores in FY21-22 to Rs 1,520.85 crores in FY22-23. Similarly, after-tax profits during the same period ascended from Rs 453.54 crores to Rs 603.5 crores.

The company’s profitability ratios, including the return on equity (RoE) and return on capital employed (RoCE), have remained stable at 15 percent over the past few financial years. Notably, the net profit margins have consistently improved, growing from 34.20 percent in FY20-21 to 39.68 percent in FY22-23.

Despite a slight increase, the company’s debt-to-equity ratio, a crucial leverage metric, has remained within acceptable limits. It rose from 0.70 times in FY21-22 to 0.99 times in FY22-23.

As of the latest shareholding data for the quarter ending September 2023, the company’s promoters retain a 31.3 percent stake. Notably, Foreign Institutional Investors (FIIs) have significantly increased their stake by over 40 percent, rising from 8.74 percent in the June 2023 quarter to 50.22 percent in the latest quarter ending September 2023.

 

Shareholding Pattern

Numbers in percentages

Mar 2023 Jun 2023 Sep 2023
Promoters + 34.87% 34.39% 31.30%
FIIs + 6.98% 8.74% 50.22%
DIIs + 5.05% 4.71% 7.52%
Public + 53.10% 52.15% 10.97%
No. of Shareholders 26,481 30,655 40,121

data taken from screener*

 

Five-Star Business Finance Limited operates in the business of providing secured loans to self-employed individuals and micro-entrepreneurs for various purposes, including business expansion and asset creation such as healthcare, education, and renovations.

 

2023-10-13 (4)

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