Add Au Small Finance Bank, target price Rs 700: ICICI Securities

ICICI Securities has add call on Au Small Finance Bank with a target price of Rs 700. The current market price of Au Small Finance Bank is Rs 623.8.


Au Small Finance Bank, incorporated in the year 1996, is a banking company (having a market cap of Rs 41309.19 Crore).

Au Small Finance Bank key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest and Interest On Balances with RBI and Other Inter-Bank Funds for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Standalone Total Income of Rs 2412.96 Crore, up 7.74 % from last quarter Total Income of Rs 2239.65 Crore and up 36.16 % from last year same quarter Total Income of Rs 1772.09 Crore. The bank has reported net profit after tax of Rs 392.83 Crore in latest quarter.

Investment Rationale
Given ~10% correction in the stock price over the past 1 month and improved visibility on it sustaining more than 1.8% RoA (no ECL impact, nil divergence) going head, the brokerage upgrades the stock to ADD with an unchanged target price of Rs 700, valuing it at 3.5x FY24E BVPS.

Promoter/FII Holdings
Promoters held 28.21 per cent stake in the company as of 30-Jun-2022, while FIIs owned 35.07 per cent, DIIs 18.41 per cent.