AU Small Finance Bank Q4 Results Review - Lower Credit Cost, Early Signs Of Yield Improvement: Centrum Broking

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Centrum Broking Report.AU Small Finance Bank Ltd. reported above estimate numbers primarily to improvement in asset quality. Net interest income for the quarter came in line at Rs 13.4 billion (our estimate: – Rs 13.7 billion). Further, non-interest income witnessed ~24% QoQ jump, thanks to pick up in business momentum. However, higher opex led to marginally lower pre-provision operating profit at Rs 6.6 billion (our estimate – 6.9 billion). Resultantly, CTI for the quarter was sequentially higher at 64.9% versus 63.0% in Q3 FY24. However, credit cost for the quarter was lower at Rs 1,325 million versus Rs 1,589 million in Q3 FY24 which was better than our expectations. Gross non-performing asset came in at 1.67% which was lower by 31 bps QoQ, net non-performing asset at 0.55% also lower by 9 bps on sequential basis thanks to collection momentum. Therefore, inspite the bank booked amalgamation expenses as exceptional item worth Rs 768 million the profit after tax was broadly in line our estimates of Rs 3.7 billion. CRAR came in at 20.06% versus 20.82% as of Q3 FY24. We maintain our Add recommendation for the stock. We roll forward to FY26 from H1 FY26 and value AU Small Finance Bank at 3.5 times ABVE for FY26E, resulting in a target price of Rs 884..Click on the attachment to read the full report:.AU Small Finance Bank Q4 Results Review - PPoP Inline; Asset Quality Improves: Motilal Oswal.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

AU Small Finance Bank Q4 Results Review - Lower Credit Cost, Early Signs Of Yield Improvement: Centrum Broking

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