AU Small Finance Bank Ltd.'s net interest income increased 57% year-on-year to Rs 2,094 crore in the fourth quarter of the last financial year, meeting analysts' estimates of Rs 2,067.8 crore.
The bank's net profit jumped 36% to Rs 504 crore from Rs 371 crore in the year-ago period, according to an exchange filing on Tuesday. Analysts tracked by Bloomberg had a consensus estimate of Rs 504.3 crore.
Asset quality improved, with the gross non-performing assets reducing by 3 basis points to 2.28% from 2.31% in the previous quarter. The net non-performing assets fell 17 bps to 0.74% from 0.91%.
According to a post-earnings call, executives of the firm said microfinance loans would take a few more quarters to reach normalcy. They expect the credit cost to improve by 20–40 basis points in the current fiscal and the net interest margin to moderate.
The executives anticipate the second half of fiscal 2026 to be better than the first half. The bank said it was in regular touch with the Reserve Bank of India over obtaining a universal backing licence.
AUSFB's focus will be expanding its branches and garnering urban deposits. The executives estimated that it might take one to two years more for the credit card stress to turn around.
Shares of AUSFB closed 1.22% lower at Rs 613.8 apiece on the NSE before the results were announced, compared to a 0.17% uptick in the benchmark Nifty. The share price has risen 1.02% in the last 12 months and 9.78% on a year-to-date basis.
Twenty-one out of the 31 analysts tracking the company have a 'buy' rating on the stock, four suggest 'hold' and six recommend 'sell', according to Bloomberg. The stock's return potential was at 11.4%.
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