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AU Small Finance Bank share rise in trade
AU Small Finance Bank share rose 3.2 per cent on Monday, registering an intraday high of Rs 742.6 per share on the BSE. The buying in Au SFB stock came on the back of the small finance bank’s July-September (Q2) update.
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In AU SFM Q2 update, the bank said that its total deposit for the quarter ended September 30 may come to Rs 1,09,690 crore as against Rs 97,290 crore in the previous quarter, clocking a growth of up 12.7 per cent.
Its Current Account Savings Account (CASA) deposits for the quarter under review are estimated at Rs 35,520 crore as against Rs 32,035 crore quarter-on-quarter (Q-o-Q), up 12.9 per cent for the period.
Its CASA ratio, however, is expected to slip to 32.4 per cent Q-o-Q from 32.9 per cent in the June quarter.
AU Small Finance Bank said its gross advances in Q2FY25 could climb 11 per cent Q-o-Q to Rs 96,030 crore in the quarter that ended September 2024, compared with Rs 90,702 crore in the quarter ended June 30.2024.
AU Small Finance’s gross loan portfolio, the bank said, is expected to come at Rs 1,05,030 crore in the September quarter as against Rs 99,792 crore seen a quarter ago. This would be a rise of 8.9 per cent.
“AU Small Finance Bank reported a healthy growth of 5.9 per cent Q-o-Q in gross advances to around Rs 96,000 crore. Including the securitised/assigned loan portfolio, the total loan portfolio grew 5.2 per cent Q-o-Q. On the liability front, total deposits grew at 12.7 per cent Q-o-Q to Rs 109,600 crore. The deposits grew at a healthy pace and surprised positively versus our expectations of 9.7 per cent,” said analysts at Motilal Oswal Financial Services.
The brokerage, which has a ‘Buy’ call on AU Small Finance Bank with a target price of Rs 830 per share, believes the small finance bank is well-positioned for strong growth, demonstrating a steady improvement in operating profitability as it capitalises on the synergies resulting from the merger with Fincare Small Finance Bank.
“A high-yielding loan book following the merger and broader product offerings, especially in the South, will facilitate profitable growth in the coming years,” MOFSL had said in a September report.
It further said that the bank maintains robust asset quality with stable credit costs.
The management expects Gross Non-Performing Assets/ Net Non-Performing Assets (GNPA/ NNPA) ratios to remain around 1.9 per cent/0.6 per cent by FY27 and Provision Coverage Ratio (PCR) to improve to 70 per cent.
In the past one year, AU Small Finance Bank shares have gained 1.2 per cent against Sensex’s rise of 24 per cent.
First Published: Oct 07 2024 | 11:12 AM IST
