AU Small Finance Bank Q4 Results Review - PPoP Inline; Asset Quality Improves: 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. reported a profit after tax of Rs 3.7 billion in Q4 FY24 (down 13% YoY), due to the stamp duty and other transaction charges related to the merger with Fincare SFB. AU SFB’s net interest income grew 10% YoY to Rs 13.37b (3% miss), while net interest margin contracted 40 bp QoQ to 5.1%.Pre-provision operating profit grew 16% YoY to Rs 6.6 billion (in line) even as opex increased 26% YoY (4% above our estimate). Cost/income ratio thus increased to 65% from 63% in Q3 FY24. Advances grew 25% YoY (~10% QoQ), led by growth in both retail and wholesale books. Deposits reported a healthy 26% YoY (8.8% QoQ) growth. C/D ratio was comfortable at 83.9% during the quarter.Groo/Net non-performing asset improved 31 bp/13 bp QoQ to 1.67%/0.55%. Credit costs moderated to 0.47%. Provision coverage ratio increased 164 bp QoQ to 67.6% in Q4 FY24. We raise our FY25E/FY26E earnings per share by 4-5% and estimate FY26 return on asset/return on equity at 1.7%/15.8%. Reiterate Buy with a target price of Rs 735 (based on 2.7 times FY26E book value)..Click on the attachment to read the full report:.AU Small Finance Bank Q4 Results: Profit Falls 12.69% On Higher Provisions.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 - PPoP Inline; Asset Quality Improves: Motilal Oswal

One-off charges related to the merger hurt reported earnings

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