JM Financial has recommended a ‘Buy’ call on Five-Star Business Finance with a revised target price of INR 1020. The company has shown a strong growth trajectory, achieving healthy AUM growth and sustained profitability metrics. With its unique positioning and deep understanding of the customer segment, Five-Star is expected to maintain its growth and deliver on profitability and asset quality metrics.
The interim budget has laid the ground for cheaper home loans and lower interest rates in general, according to lenders. The lower fiscal deficit has meant borrowing is almost Rs 1 lakh crore lower than expected. The Centre is seen as having put subtle pressure on RBI to boost liquidity and soften interest rates. Financiers are also expecting home loans to get cheaper because of the two affordable housing schemes the government announced.
Liquid funds, commonly used by corporates to park short-term cash, have experienced significant outflows due to the Reserve Bank of India’s measures to tighten liquidity conditions and cyclical outflows at the end of the half-year. Data from the Association of Mutual Funds in India (AMFI) shows that liquid funds witnessed net outflows of ₹74,176 crore in September, the highest among debt oriented schemes. Bond yields have risen sharply since August as the RBI has drained excess liquidity from the banking system.
