Synopsis:
AU Small Finance Bank took an 8% hit on its share price despite reporting a rise in total income as its asset quality worsens.
The stock of this leading small finance bank is in focus after its asset quality deteriorated during the period, which caused the stock to plunge by approximately 8 percent. In this article, we will dive deep into the details.
With a market capitalisation of Rs 56,012 crore, the shares of AU Small Finance Bank Ltd are currently trading at Rs 752 per share, down by 10.57 percent from its 52-week high of Rs 840.95 per share. Over the past five years, the stock has delivered a positive return of 90 percent.
Q1 Highlights
It reported a total income growth of 21 percent to Rs 5,189 crore in Q1 FY26 as compared to Rs 4,278 crore in Q1 FY25. Net interest income and other income grew by 6 percent and 59 percent, respectively. Other Income growth is mainly fueled by income from treasury operations worth Rs 300 crore.
Coming to its profitability, the bank reported a net profit growth of 16 percent to Rs 581 crore in Q1 FY26 as compared to Rs 503 crore in Q1 FY25. Its NIM declined by 60 bps during the same period, which currently stands at 5.4 percent.
Its deposits grew by 31.25 percent to Rs 1,27,696 crore in Q1 FY26 as compared to Rs 97,290 crore in Q1 FY25. Also, Gross Advances grew by 23 percent to Rs 1,11,614 crore from Rs 90,702 crore during the same period. CASA deposits also grew by 16 percent to Rs 37,241 crore.
Its Gross Loan Portfolio (GLP) declined by 21.69 percent to Rs 6,232 crore in Q1 FY26 from Rs 7,958 crore in Q1 FY25. Telangana has the highest share in its GLP which is 14 percent, followed by Gujarat with 12 percent, Karnataka with 11 percent, Tamil Nadu with 10 percent and so on.
It has a Total Loan Portfolio of Rs 1,17,624 crore, of which 66.9 percent are backed by secured loans, 20.8 percent by commercial banking, and 8.1 percent being exposed as unsecured loans.
One concern that hampered the bank is its worsening asset quality. Its Gross Non-Performing Asset (GNPA) increased by 69 bps to 2.47 percent from 1.78 percent a year ago. Additionally, its Net Non-Performing Asset (NNPA) increased by 25 bps to 0.88 percent from 0.63 percent a year ago
Written by Satyajeet Mukherjee
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