Posts tagged Five Star Business Finance
Five Star Business Finance has huge untapped opportunity of INR 22trn. Buy for target price of Rs 860 (19% upside): ICICI Sec | |
Company: | Five Star Business Finance |
Brokerage: | ICICI Securities |
Date of report: | September 6, 2023 |
Type of Report: | Result Update |
Recommendation: | Buy |
Upside Potential: | 19% |
Summary: | 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. Notably, gross stage 3 increased marginally to 1.36% in FY23 vs 1.06% in FY22 despite the implementation of daily DPD recognition from Oct’22. Maintain BUY with an unchanged target price of INR 860, valuing the stock at 4.5x on Sep’24 BVPS |
Full Report: | Click here to view full post with link to download pdf file |
Tags: | ICICI Securities |