AUBANK.NSE AU Small Finance Bank Limited

AU Small Finance Bank continues to focus on strengthening its core portfolio, which is vehicle and Micro Small and Medium Enterprises loans, where long-term growth has been steady at around 20 percent compounded annually.

Motilal Oswal is bullish on AU Small Finance Bank recommended buy rating on the stock with a target price of Rs 825 in its research report dated August 17, 2023.

Emkay Global Financial recommended hold rating on AU Small Finance Bank with a target price of Rs 730 in its research report dated July 23, 2023.

Motilal Oswal recommended Neutral rating on AU Small Finance Bank with a target price of Rs 810 in its research report dated July 23, 2023.

Total income increased by 40.1% to Rs 2,773.46 crore in Q1 FY24 as compared with Rs 1,979.35 crore in Q1 FY23.Net interest income (NII) stood at Rs 1,246 crore in Q1 FY24, was up 28% as compared with Rs 976 crore in Q1FY23.Net interest margin (NIM) for the quarter declined to 5.7% in Q1 FY24 compared with 5.9% in Q1 FY23. Operating expenses jumped 37% to Rs 1,015 crore during the period under review.Pre-provisioning profit in Q1 FY24 was Rs 546 crore, up by 39% from Rs 394 crore in Q1 FY23. Provisions dropped by 14% YoY to Rs 33 crore.The banks deposits grew by 27% YoY to Rs 69,315 crore while gross advances increased by 29% YoY to Rs 63,635 crore. Cost of funds for Q1 FY24 increased by 29 bps to 6.58%.The banks gross non-performing assets (NPAs) stood at Rs 1,121 crore as on 30 June 2023 as against Rs 981 crore as on 31 March 2023 and Rs 970 crore as on 30 June 2022.The banks asset quality improved significantly with GNPA at 1.76% as on 30 June 2023 as against 1.96% as on 30 June 2022. Net NPA stood at 0.55% of net advances as of June 2023 as compared to 0.56% posted in June 2022.Provision coverage ratio remained at 73% including technical write off and floating provision.CRAR was at 21.5% and Tier I at 19.9% as on 30 June 2023; CRAR was at 19.4% and Tier 1 at 18.4% as on 30 June 2022.During the quarter, the customer base using digital properties like “AU 0101” increased to 21.6 Lakh from 11.9 Lac in Q1FY23. Of these, 12.2 Lakh customers have been availing services actively on monthly basis.The bank added 11 touchpoints and branches during the quarter and for the full year, bank plans to open more than 50 branches and touchpoints additionally.Commenting on the performance, Sanjay Agarwal, MD & CEO, AU Small Finance Bank said, “The first quarter of FY24 saw improved macro environment with moderating inflation, narrowing current account deficit and rising foreign exchange reserves. The rural economy also continued to recover and the monsoon is likely to support the credit demand in rural and semi-urban areas. I am quite optimistic about the Indian economy and the banking sector looks poised for sustained period of growth.The strong performance in this quarter is a testimony to our highly competent and empowered team and our business model which allows us to capture customer imagination, which in turn allows us to service our customers in an innovative manner.”AU Small Finance Bank (AU SFBAU) is a scheduled commercial bank, a Fortune India 500 Company and the largest Small Finance Bank in the country.The scrip declined 3.91% to Rs 735.20 on the BSE.

HDFC Securities recommended reduce rating on AU Small Finance Bank with a target price of Rs 580 in its research report dated July 21, 2023.