Five-Star Business Finance Ltd Hits All-Time Low Amid Prolonged Downtrend

Stock Performance Overview

The stock has been on a consistent slide, losing value for six consecutive trading sessions and registering a cumulative decline of 5.76% during this period. Today’s fall of 1.12% outpaced the broader Sensex’s decline of 0.63%, underscoring the stock’s relative weakness. Over the past week, Five-Star Business Finance Ltd has declined by 4.68%, compared to the Sensex’s 1.31% drop.

More strikingly, the stock’s one-month performance shows a steep fall of 18.29%, while the Sensex remained nearly flat with a marginal 0.16% decrease. The three-month return paints an even bleaker picture, with the stock down 29.01% against the Sensex’s 4.66% loss. Over the last year, the stock has plummeted 42.58%, in stark contrast to the Sensex’s positive 9.54% gain.

Year-to-date, Five-Star Business Finance Ltd has declined 23.47%, significantly underperforming the Sensex’s 4.10% loss. The three-year and five-year returns remain negative at -20.77% and 0.00% respectively, while the Sensex has delivered robust gains of 37.85% and 66.45% over the same periods. The ten-year return for the stock remains flat at 0.00%, compared to the Sensex’s impressive 252.97% growth.

Technical Indicators and Moving Averages

Technically, the stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a persistent bearish trend. This positioning suggests that short-term and long-term momentum remain weak, with no immediate signs of reversal based on these metrics.

Market Capitalisation and Ratings

Five-Star Business Finance Ltd holds a Market Cap Grade of 3, indicating a mid-tier market capitalisation relative to its peers. The company’s Mojo Score currently stands at 47.0, reflecting a Sell rating, a downgrade from its previous Hold grade as of 27 October 2025. This shift in rating underscores the deteriorating market perception of the stock’s prospects.

Financial Performance and Valuation Metrics

Despite the stock’s recent price weakness, Five-Star Business Finance Ltd exhibits strong long-term fundamental metrics. The company has maintained an average Return on Equity (ROE) of 16.02%, signalling efficient utilisation of shareholder capital. Net sales have grown at an annualised rate of 30.74%, while operating profit has expanded at a similar pace of 30.59% over the long term.

The company’s ROE of 16.3% supports a valuation that is considered very attractive, with a Price to Book Value ratio of 1.8. This valuation is broadly in line with historical averages for its peer group, suggesting the stock is trading at a fair value relative to its fundamentals.

Over the past year, while the stock price has declined by 42.58%, the company’s profits have increased by 7.7%. The Price/Earnings to Growth (PEG) ratio stands at 1.6, indicating a moderate valuation when factoring in earnings growth.

Institutional Holdings and Market Context

Institutional investors hold a significant 67.68% stake in Five-Star Business Finance Ltd. This high level of institutional ownership reflects confidence from entities with extensive resources and analytical capabilities, which often provide a stabilising influence on stock performance.

Nevertheless, the stock’s underperformance relative to the BSE500 index over the last three months, one year, and three years highlights persistent challenges in maintaining market confidence. The flat results reported in December 2025 have contributed to the cautious stance reflected in the current Sell rating.

Comparative Sector and Market Performance

Within the Non Banking Financial Company (NBFC) sector, Five-Star Business Finance Ltd’s performance has been notably weaker than sector averages. The stock’s decline has been largely in line with sector movements on the day of the all-time low, but its longer-term returns lag significantly behind both sector and broader market benchmarks.

This divergence is evident in the stock’s relative underperformance against the Sensex and BSE500 indices, which have delivered positive returns over the same periods. The stock’s inability to keep pace with these benchmarks highlights the severity of its current market position.

Summary of Key Metrics

To summarise, Five-Star Business Finance Ltd’s stock price has reached Rs.417.25, its lowest level ever recorded. The stock’s six-day consecutive decline and underperformance across multiple time frames underscore a challenging environment. While the company’s fundamental financial metrics remain robust, including strong ROE and healthy sales and profit growth, these have not translated into positive stock price momentum.

The downgrade from Hold to Sell by MarketsMOJO on 27 October 2025 reflects this disconnect between fundamentals and market valuation. The stock’s current trading below all major moving averages further emphasises the prevailing negative sentiment.

Institutional investors continue to hold a majority stake, suggesting confidence in the company’s underlying business, yet the stock’s relative weakness compared to sector and market indices remains a notable feature of its recent performance.

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