AU Small Finance Bank posts lower-than-expected Q2 results; stock sinks 9%

AU Small Finance Bank (NSE: AUBANK) shares fell over 9 per cent in the morning deals on Monday, October 30, touching a low of Rs 630.9 apiece. The free fall in the stock was witnessed after the company posted lower-than-expected September quarter (Q2 FY24) numbers.

At around 10:13 a.m., shares of AU Small Finance Bank traded 7.92 per cent or Rs 54.65, lower at Rs 635.10 apiece. The market capitalisation of the company stood at Rs 42,439.2 crore. 

On Saturday, October 28, the Jaipur-based lender announced its July–September quarter results. The company logged a standalone net profit of Rs 402 crore. Zee Business analysts had expected the figure to come in at Rs 410 crore. The net interest income (NII) of the bank stood at Rs 1,249 crore, against the estimation of Rs 1,310 crore.

Sequentially, the gross non-performing assets (GNPA) rose to 1.91 per cent from 1.76 per cent. The net non-performing assets (NNPA) stood at 0.6 per cent as against 0.55 per cent quarter-on-quarter (QoQ). 

A day after announcing the second quarter results, the company, through a regulatory filing, informed the board that it had approved the merger of AU Small Finance Bank with Fincare Small Finance Bank.

"The Board of Directors of AU Small Finance Bank Limited, at its meeting held today on October 29, has considered and approved the scheme of amalgamation for the amalgamation of Fincare Small Finance Bank Limited into and with AU Small Finance Bank Limited," the filing read.

Analyst's views 

Morgan Stanley has continued with the 'overweight' rating on the stock and has given the target of Rs 925 apiece. 

Zee Business panellist Rakesh Bansal has recommended selling shares of AU Small Finance Bank for a target of Rs 665 apiece to Rs 660 apiece, keeping the stop loss at Rs 708 apiece.

AU Small Finance Bank share price: Past performance

Since January, the stock has lost over 2 per cent, slipping against the headline index's rise of over 4 per cent. 

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