AU SFB – A long growth runway ahead

Earning trajectory of AU SFB looks good as the bank has adequate capital, right products and the technology backbone to take on competition

Madhuchanda Dey
September 12, 2022 / 12:10 PM IST
PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

AU Small Finance Bank (CMP: Rs 660, Market Cap: Rs 43,924 crore) has all the right ingredients to take a pole position in the financials pack. However, in the past four months, the stock has underperformed both the Nifty and the Bank Nifty significantly as the Street wasn’t too happy with the Q1 performance marred by lower interest margin and trading losses. However, with the return  of normalcy and a good upcoming festive season, the second half is likely...