AU SFB shares hit the day’s low of ₹845.65 on the BSE, shedding as much as 9.45 per cent in intraday deals. As of 9.53 AM, the banking counter was trading 5.70 per cent lower at ₹880.75 apiece, with 3 million shares of the company having changed hands so far on BSE and NSE combined.
AU SFB share price history
AU SFB, which posted its earnings over the weekend, reported a profit after tax (PAT) growth of 53 per cent year-on-year (YoY) to ₹858 crore, with annualised RoA of 1.7 per cent and RoE of 16.1 per cent.
Its net interest income (NII), the difference between interest earned and expended, rose 32 per cent to ₹2,820 crore. Meanwhile, the net interest margin (NIM) rose 33 bps YoY to 5.8 per cent. The management expects limited headroom for further COF reduction amid tight liquidity, keeping NIMs broadly rangebound.
Credit costs stood at 73–74bps in H1FY27 as against FY27 guidance of ~90bps, while the unsecured portfolio is stable and collection efficiency is resilient at 99 per cent.
AU SFB: What analysts recommend
Emkay said that AU SFB reported a PAT miss of 2 per cent, driven by higher opex (branch expansion, 100+ asset centers), partly offset by lower provisions (10 per cent below estimates).
We expect ROA to improve to 1.7-1.8 per cent over FY27-29E from 1.5 per cent in FY26, it said, but retained a ‘REDUCE’ call on AU SFB stock with an unchanged target price of ₹950, given current valuations (2.5x Sep-28E ABV) offer limited margin of safety amid the raging macro-uncertainties.
Furthermore, gross and net slippages rose 24 and 18bps sequentially on seasonal tractor billing but improved 70 and 42bps YoY. Management reiterated cross-cycle credit cost of 90–100bps and remains watchful for any emerging stress. JM Financial said that AU SFB continues to deliver industry-leading growth with credit cost comfortably within guidance.
However, “we think the NIM trajectory in a rising-rate environment and the bank’s high reliance on insurance income (14 per cent of PBT versus ~5 per cent for our banks coverage), amid the RBI’s consultation paper, are key variables to monitor”, it said.
JM Financial forecasts an average RoA/RoE of 1.7 per cent and 17 per cent over FY27–29E and maintains a BUY with a revised target of ₹1,110 (₹1,165 earlier), valuing the bank at 3.0x FY28E P/BV (3.1x FY28E P/BV earlier).
Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.
