Five-Star Business Finance Ltd.
ISIN: INE128S01021 • Market Cap: ₹15,372 Cr
The 5-Pillar Quality Audit for Five-Star Business Finance Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (67.4%), Return on Capital Employed (17.0%), and equity compounding (14.9%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 1.12 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (106.7%) and 3Y PAT CAGR (125.2%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 13.93 vs PEG of 0.73 and Dividend Yield of 0.4%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 18.6%, backed by 66.3% institutional ownership.
Key Fundamental Strengths
Strong Topline Expansion (3Y Sales CAGR: 106.7%)
Revenue has expanded at 106.7% CAGR over 3 years, signaling industry market-share gains.
High-Velocity Profit Compounding (3Y PAT CAGR: 125.2%)
Net earnings have compounded at 125.2% annualized, demonstrating operating leverage.
Attractive Valuation Margin (P/E: 13.93)
Trading at a P/E multiple of 13.93, the stock offers a favourable risk-reward entry for quality compounding.
Deep Institutional Sponsorship (66.3%)
Mutual funds, domestic DIIs, and foreign FIIs hold 66.3%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Elevated Financial Gearing (D/E: 1.12)
Debt-to-Equity exceeds 0.9x, meaning substantial operating earnings are absorbed by mandatory interest coverage.
Sectoral & Macro Headwinds (Financial Services)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Financial Services space.
Quantitative Strategy Eligibility
Checking FIVESTAR against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Passes Saurabh Mukherjea's Coffee Can rule: 10%+ sustained revenue growth and 15%+ ROCE/ROE.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 79/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Provides balanced valuation margin with strong profitability scores.
Financial Services Sector Peer Comparison
Compare FIVESTAR directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Five-Star Business Finance Ltd. (FIVESTAR)Current | 79/100 | ₹15,372 Cr | 13.93 | 17.0% | 1.12 | — |
| HDFC Bank Ltd. (HDFCBANK) | 74/100 | ₹11.10 Lakh Cr | 14.05 | 12.8% | 1.01 | View |
| ICICI Bank Ltd. (ICICIBANK) | 76/100 | ₹10.06 Lakh Cr | 17.94 | 16.5% | 0.62 | View |
| State Bank of India (SBIN) | 71/100 | ₹9.66 Lakh Cr | 11.20 | 12.2% | 1.38 | View |
| Bajaj Finance Ltd. (BAJFINANCE) | 68/100 | ₹6.72 Lakh Cr | 33.07 | 13.9% | 3.86 | View |
| Life Insurance Corporation of India (LICI) | 87/100 | ₹5.22 Lakh Cr | 8.70 | 37.8% | 0.00 | View |
Frequently Asked Questions: Five-Star Business Finance Ltd.
Q:What is the 5-Pillar Fundamental Score for Five-Star Business Finance Ltd. (FIVESTAR)?
Five-Star Business Finance Ltd. has a RupeeTools Fundamental Score of 79/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (81/100), Financial Health (61/100), Growth (99/100), Valuation (95/100), and Ownership Quality (65/100).
Q:Is FIVESTAR fundamentally strong for long-term investment?
Yes, FIVESTAR exhibits solid fundamental strength with a 79/100 score, driven by a return on equity of 14.9% and a debt-to-equity ratio of 1.12.
Q:Does FIVESTAR pass the Coffee Can Investing filter?
Yes! FIVESTAR satisfies both core pillars of Coffee Can Investing: achieving consistently high capital returns (ROCE/ROE >= 15%) alongside double-digit multi-year revenue growth.
Q:How does FIVESTAR compare against other Financial Services peers?
Within India's Financial Services sector, FIVESTAR trades at a P/E of 13.93 and generates an ROCE of 17.0%. Compare its 5-Pillar score of 79/100 against top sector peers like HDFC Bank Ltd. (74/100), ICICI Bank Ltd. (76/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.