Sharekhan has given Buy recommendation for AU Small Finance Bank with a target price of Rs. 1060 in its research report issued on Jan 29, 2021
Sharekhan’s research report on AU Small Finance Bank
Q3 numbers were mixed, wherein operating performance beat expectations; but tepid advances growth and rise in proforma GNPA were dampeners. Bank expects credit cost to normalise from Q4 FY2021; collection efficiency has improved across most segments; restructuring book to be at ~1.5% of total by Q4 and is manageable. As a large part of loan book is secured (98%) and collections are improving, we find stock attractive as it has a long growth runway.
AUSFB trades at 4.6x/3.7x its FY2022E/FY2023E ABPVS; We maintain a Buy with unchanged PT of Rs. 1,060.
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