AU Small Finance Bank - On A Long Growth Runway: Motilal Oswal

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..Motilal Oswal Report.AU Small Finance Bank Ltd. is well-positioned to deliver superior growth with a steady improvement in operating profitability as it benefits from the synergies following its merger with Fincare SFB. This merger enables the bank to benefit from a higher-yielding loan book and a broader product suite, thereby driving growth, particularly in the South. The bank’s recent application for a Universal Bank license is expected to ease regulatory requirements and enhance brand positioning, thus supporting growth while improving deposit productivity. While net interest margin may moderate slightly due to the rising cost of funds, improved disbursement yields and potential rate cuts are likely to improve margins over FY26E. AU Small Finance Bank aims for a 1.6% RoA in FY25 with a potential for 1.8% by FY27E. We estimate AU SFB to deliver ~24% loan growth CAGR and ~32% PAT CAGR over FY25-FY27. With strong execution capabilities and a proven management track record, we remain optimistic about AU SFB’s growth and reiterate a Buy rating with a revised target price of Rs 830 (premised on 3.2 times FY26E book value)..Click on the attachment to read the full report:.P&G Hygiene - Focusing On Sustainable Growth; Rich Valuation Limits Upside: 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 - On A Long Growth Runway: Motilal Oswal

The brokerage reiterates 'Buy' rating on the stock with a revised target price of Rs 830.

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