The shares of this midcap banking company jumped 3 percent after the well-known investment banker Morgan Stanely raised the target price for the stock to Rs 1,000 per share, indicating an upside of 37 percent from the current price.
With a market capitalization of Rs. 46,740 crores, the shares of AU Small Finance Bank Ltd opened its Monday trading session on a higher note at Rs. 713. The share hit an intraday high at Rs. 732.40 making a gain of around 3 percent and closed its day at Rs. 729.75 apiece.
Morgan Stanely, one of the well-known Global brokerage firms, has given an ‘Over-Weight’ rating on the company’s stock with a target of Rs.1,000 per share indicating a potential upside movement of around 37 percent against 31 percent earlier.
The analyst mentioned that the bank is at an inflection point and is well-placed to more than double its earnings per share (EPS) over the period FY 23-26
Furthermore, the brokerage stated that the margins have bottomed out, and the company is expected to improve these over the next few years as against many Indian banks, in the future which are expected to see a further decline in net interest margins (NIMs).
A leading digital-first small finance bank, Fincare Small Finance Bank, will be merged into AU Small Finance Bank through the RBI-administered scheme of amalgamation under Section 44A of the Banking Regulation Act, 1949. By this, investment banking expects a potential material upside.
Coming into the financial statement, the revenue increased by around 8 percent from Rs. 2,734 crores during the June quarter to Rs. 2,956 crores in the September quarter. On a contrasting note, net profit declined by around 4 percent from Rs. 401 crores to Rs. 386 crores during the same period.
According to the latest shareholding pattern, the promoters hold a 25.49 percent stake in the company, FIIs have a considerable stake of 41.61 percent, DIIs have 19.59 percent shares, and the remaining 13.31 percent holdings are with the public.
Headquartered in Jaipur, AU Small Finance Bank Ltd was incorporated in the year 1996. The company provides almost all banking products & services, including High-Interest Rate Savings Accounts, Fixed Deposits, Debit Cards, Credit Cards, Retail Loans, Insurance, and Investments, among others.
Written By Vaibhav Patil
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.