Nuvama

Five-Star’s Q2FY26 earnings overshot consensus by 5% driven by a beat on other income and opex. Growth remained subdued with disbursals declining 7% QoQ versus a steeper contraction of 12% YoY in Q1. Growth was impacted

Sector Update

Banking & Finance

October 03, 2025

Q2FY26E—Sequential traction likely

A pickup in sequential loan growth, lower fall in NIM (except for a handful), lower trading gains and asset quality improvement for large private banks that reported a deterioration in Q1FY26 are key highlights. System

Sector Update

Banking & Finance

October 01, 2025

RBI pushes for growth and resilience

The RBI announced measures to make the financial sector more resilient and facilitate higher growth in housing, residential real estate (RE), infra, MSME and large corporate borrowers.

Sector Update

Banking & Finance

September 22, 2025

PSU banks provide positive guidance

PSU banks are guiding for healthy loan growth and a moderate decline in NIM. Asset quality is likely to remain healthy. BoB has guided for a strong QoQ loan growth of ~4% or more while PNB, Canara and Indian Bank are all

Result Update

Five-Star Business Finance Ltd

Borrower leverage affects with lag

Five-Star reported a soft quarter in Q1FY26 with a sharp rise in credit cost and stressed loans. Credit cost rose to 1.6% of AUM from 0.9% QoQ. The 30+DPD rose to 11.3% from 9.65% QoQ. The rise in stress is due to rising

Sector Update

Banking & Finance

July 07, 2025

Q1FY26E – A weak quarter

Slowing loan growth, pressure on NIM for banks from rate cuts and a more pronounced seasonal weakness in asset quality for some lenders make Q1FY26E a weak quarter. Systemic loan growth has fallen below 10% YoY (-0.5%

Result Update

Five-Star Business Finance Ltd

Slower EPS growth in FY26E

Five Star’s Q4FY25 PAT grew 18% YoY /2% QoQ, in line with consensus. AUM/disbursals rose QoQ after the recalibration in Q3. The share of INR0.5–1mn ATS rose 2% QoQ while less than INR0.3mn fell 5% QoQ. CE deteriorated

Sector Update

Banking & Finance

April 21, 2025

Positive final LCR norms a big relief

The RBI has revised its LCR guidelines favourably, in contrast to the previously negative draft. The final guidelines reduce the runoff rate for digital deposits to 2.5% from 5% in the draft. A new norm of reducing

Sector Update

Banking & Finance

April 09, 2025

New gold norms to take sheen off growth

The RBI’s new draft gold finance norms will be negative for growth, though they are less strict than feared. The LTV definition has been tightened more for NBFCs than banks. LTV remains unchanged at 75%. But the LTV on

Sector Update

Banking & Finance

April 03, 2025

Some seasonal improvement

NIM shall marginally decrease in Q4FY25 with a bigger decline in Q1FY26 (for ICICI, NIM shall improve). For ICICI, HDFC and AXIS, slippage will fall QoQ. For MFI banks, slippage will stay elevated. Credit cost for

The RBI has eased three norms: i) The regulator has reduced risk weights on MFI business loans of banks to 75% from 125% (as these are now part of regulatory retail) and to 100% on MFI consumption loans. ii) Risk weights

Result Update

Five-Star Business Finance Ltd

Q3FY25 — in-line quarter

Five-Star announced in-line Q3FY25 earnings with the guided moderation in growth and NIM coming through. 30+ DPD moved up from 8.4% to 9.2% with current bucket CE marginally lower at 96.7% in Dec-24 versus 97.5% Dec-23.

Sector Update

Banking & Finance

January 03, 2025

Q3FY25 – A challenging quarter

Q3FY25 has been a tough quarter with higher credit cost, decelerating loan growth, shortage of deposits even amidst slowing loan growth, moderate pressure on NIM and lower trading gains. Asset quality is the overwhelming

Sector Update

Banking & Finance

December 13, 2024

Banking & Finance – Deposit growth still a challenge; Sector Update

While deposit growth has converged with loan growth at 10.7% YoY, it is still soft with incremental deposits lower YoY in the first two months of Q3FY25. Incremental LDR remains well above 100%. More importantly,

Result Update

Five-Star Business Finance Ltd

Strong earnings and asset quality

Five-Star announced in-line earnings and stable asset quality in Q2FY25. The company has slowed disbursal growth in view of sectoral issues and regulatory nudge. Disbursals grew 4% YoY/fell 5% QoQ. AUM growth stood

Sector Update

Banking & Finance

September 19, 2024

Sensitivity to rise in credit cost

Contrary to fears, gross specific credit cost (GCC) for both private and state banks fell YoY in FY24 (except for Kotak and AUSFB). The fear is that there will be a move towards normalisation over coming quarters. While

Sector Update

Banking & Finance

September 05, 2024

Revisiting risks of CEO reappointment

We believe risks pertaining to CEO reappointment at AXIS Bank (AXIS) and IndusInd (IIB) are fading, and that is positive for both. For AXIS, the Board has already approved incumbent CEO’s reappointment; the risk is

Sector Update

Banking & Finance

August 28, 2024

UPS – Negative for state banks

The central government has announced the Unified Pension Scheme (UPS) with defined benefits for employees as opposed to market-linked returns under the current National Pension System (NPS). Employers’ contribution will

Result Update

Five-Star Business Finance Ltd

Strong earnings in tough quarter

Five-Star posted strong numbers in Q1FY25 yet again with PAT growing 37% YoY/7% QoQ, on an already strong base in Q4FY24. The 30+DPD inched up 22bp QoQ compared with higher deterioration at peers as it took special

Sector Update

Banking & Finance

July 26, 2024

Tighter LCR will call for 4% more deposits

The RBI has proposed to tighten the LCR by: i) increasing run-off factor by 5% for digitally enabled retail deposits and unsecured wholesale funding; ii) assigning 100% run-off on pledged deposits; and iii) capping the

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