What should investors do with AU Small Finance Bank shares after its Q4 results?

Shares of AU Small Finance Bank gained over 2 per cent in the morning deals on Thursday and touched the day's high at Rs 633 apiece. The buying in the stock came a day after the bank reported its Q4FY24 numbers. 

At around 10:10 a.m., shares of AU Small Finance Bank traded 1.39 per cent or Rs 8.6, higher at Rs 626.5 apiece. The market capitalisation of the company at around the same time stood at Rs 46,529.39 crore. The stock closed 1.38 per cent lower at Rs 609.4 apiece. 

AU Small Finance Bank Q4 results

The bank reported its fourth-quarter numbers on Wednesday after market hours. The Q4 results showed that its profit after tax (PAT) declined 12.7 per cent to Rs 370.7 crore against Rs 424.6 crore year-on-year (YoY) which was estimated at Rs 370 crore by Zee Business analysts.

The net interest income (NII) of the bank increased 10.2 per cent at Rs 1,337 crore in the quarter under review against Rs 1,213.21 crore a year ago. 

The provisions of the small finance bank were up 3.2 times at Rs 132.5 crore against Rs 40.9 crore a year ago. However, it fell 16.6 per cent on a sequential basis against Rs 158.9 crore recorded in the October to December quarter.

The bank's net interest margin (NIM) for the quarter under review stood at  5.1 per cent against 5.5 per cent on a quarter-on-quarter (QoQ) basis. The gross non-performing assets or GNPA for the quarter stood at 1.67 per cent against 1.98 per cent QoQ and net non-performing assets or NNPA for the fourth quarter stood at 0.55 per cent against 0.68 per cent QoQ. 

What should investors do?

Nomura iterated its 'neutral' stance on the stock and raised the target to Rs 625 from Rs 600 apiece. Meanwhile, Citi maintained a 'neutral' rating and raised the target to Rs 646 from Rs 622.

Additionally, Morgan Stanley continued with an 'overweight' rating and gave a target of Rs 850 apiece.

AU Small Finance Bank share price: Past performance

In a year, AU Small Finance Bank shares have lost over 5 per cent against Nifty50's rise of over 26 per cent.

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