Au Small Finance Bank Ltd. share price target

AU Small Finance Bank (AU SFB) has always remained ahead in pre-empting future business trends and building capabilities to serve the evolving needs of customers.

Steady decline in GNPL ratio to 1.9% (1.96% in Q1FY23), b) 30bps QoQ expansion in NIM with 10bps QoQ increase in incremental spread and ~275bps QoQ reduction in cost/income ratio (led by 11% QoQ NII growth).

We reiterate our BUY recommendation on AUSFB, valuing the stock at 4.1x FY24E ABV to arrive at a target price of Rs 750/share, implying an upside of 20% from the CMP.

We recommend a BUY rating on the stock with a near term TP of Rs 705, implying an upside of 10% from CMP.

AU Small Finance Bank (SFB) is a small finance bank that has recently transitioned from a prominent, retail-focused NBFC.

We maintain our BUY recommendation on the stock and value AUSFB at 4.8x FY24E ABV to arrive at a target price of Rs 1,560/share, implying an upside of 10% from CMP.

AUBANK delivered a robust performance with 9% earnings beat led by 43% YoY NII growth, stable margins and double-digit sequential business growth. Asset quality improved sharply with GNPA/NNPA ratio declining 62bp/79bp QoQ to 1.98%/0.5%, respectively, driven by robust collection efficiencies and healthy reductions. The restructured portfolio declined to 2.5% of loans (from 3.1% in 3QFY22), while PCR improved sharply by 2,420bp QoQ to 75% as the bank prudently revised its provisioning policy to reinforce its balance sheet. AUBANK further announced a bonus issue of 1:1 and recommended a...

AU Small Finance Bank (AU) has always remained ahead in pre-empting future business trends and building capabilities to serve the evolving needs of customers. We derive this view from AU’s past initiatives.