Should you buy or sell AU Small Finance Bank shares post its Q4 results?

AU Small Finance Bank share price: The bank on Tuesday, after market hours, reported a 36 per cent rise in its net profit for Q4, to ₹504 crore as against to ₹371 crore a year ago

AU Small Finance Bank share price: Shares of AU Small Finance Bank jumped 6.4 per cent in trade, logging an intraday high at ₹652.75 on the BSE. The stock was in demand after the small finance bank reported its Q4 results. 

 

At 10:10 AM, AU Small Finance Bank shares were trading 5.78 per cent higher at ₹648.75 per share on the BSE. In comparison, the BSE Sensex was up 0.53 per cent at 80,013.96. The market capitalisation of the company stood at ₹48,267.91 crore. The 52-week high of the stock was at ₹755 per share and 52-week low of the stock was at ₹479 per share.

AU Small Finance Bank Q4 results 

The bank on Tuesday, after market hours, reported a 36 per cent rise in its net profit for the fourth quarter ended March 31, 2025, to ₹504 crore as compared to ₹371 crore a year ago. 

 

Its net interest income (NII) increased 57 per cent year-on-year (Y-o-Y) to ₹2,094 crore as compared to ₹1,337 crore a year ago. Meanwhile, net interest margin (NIM) for the quarter under review stood at 6 per cent as compared to 5.1 per cent a year ago. In Q3 NII stood at ₹2,023 crore and NIM stood at 5.9 per cent.

 

NIM also improved from 5.45 per cent in FY24 to 5.94 per cent in FY25 on account of high-yielding Fincare book as well as focus on increasing the yield in the core vintage books, according to the company's statement. 

 

It further stated that Q4 saw some pull back in asset quality with gross net performing asset (GNPA) and net non-performing asset (NNPA) improving to 2.28 per cent and 0.74 per cent respectively compared to 2.31 per cent and 0.91 per cent in Q3FY25.

 

Further, slippages improved to 0.9 per cent in Q4 as compared to 1 per cent in Q3, led by improvement in secured assets and Microfinance Institution (MFI). 

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Result analysis: HDFC Securities on AU Small Finance Q4FY25

The brokerage expects FY26E margins to stay under pressurefrom the rate cut cycle coupled with the higher secured mix, offset by the downward normalisation of credit cost. "We raise our FY26E/27E earnings estimates by 7 per cent each but remain cautious on the normalisation of credit costs in unsecured segments," it said in a note. It maintained a 'Reduce' rating and revised the target to ₹595 per share from ₹580.

Result analysis: Centrum on AU Small Finance Q4FY25

Looking ahead, we expect AU Small Finance Bank to deliver robust book value growth of 18 per cent compound annual growth rate (CAGR) over FY25–FY27E, alongside an attractive return profile with return on asset (RoA) expected to reach 1.85 per cent by FY27, Centrum said in its note. The brokerage reiterated its 'Buy' rating with a revised target price to ₹772 per share from ₹748.

Result analysis: Nuvama on AU Small Finance Q4 results

Nuvama also iterated its 'Reduce' rating on the stock with a target at ₹530. Credit cost shall settle at a lower 85 basis points (bps) in FY26 against 1.3 per cent Y-o-Y with H1 being elevated due to MFI write-offs. Credit cost shall fall to 6–7 per cent from 16 per cent in Q4FY25 on the cards and to 3.5 per cent in MFI. NIM shall be under pressure in FY26 due to repricing of 70 per cent loans and lower than system current account savings account (CASA). Loan growth shall be 21–25 per cent Y-o-Y," Nuvama said. 

 

About AU Small Finance Bank 

AU Small Finance Bank is a Scheduled Commercial Bank and has established itself in April 2017. The small finance entity provides comprehensive banking solutions across deposits, loans, credit cards, premium banking, remittance services, merchant solutions, insurance, and investments.