AU Small Finance Bank has shown strong operation performance. At the same time, despite the challenges of COVID 19, the bank has been able to improve its asset quality.
Today flat trading is being seen in the shares of AU Small Finance Bank. Although the stock has weakened in double digits in the last 1 month. At the same time, 22 percent has weakened from the record high. Brokerage houses are considering this fall as an opportunity to invest in stocks. The brokerage house says that the operating performance of Small Finance Bank is strong. At the same time, the asset quality of the bank is continuously improving even in the challenging environment, the business growth outlook looks good going forward. Brokerage house Motilal Oswal and brokerage house Morgan Stanell have given investment advice expressing confidence in the stock.
Motilal Oswal
Brokerage house Motilal Oswal has given investment advice in the shares of AU Small Finance Bank with a target of Rs 1550. Whereas the current price of the share is Rs 1162. In this sense, it can give 33 percent return. The brokerage says that the bank has shown strong operating performance. Business growth has been good. At the same time, even after the challenges of COVID 19, the bank has been able to improve its asset quality. As the economic recovery takes place in the country, AU Small Finance Bank is in a better position to take its advantage.
The brokerage says that macro indicators are looking strong. Data on GST collection, GDP growth, PMI has been better and further improvement is expected. The retail business of the bank is good, due to which further growth in margin can be seen. The collection efficiency has gone up to 106%. The bank has a good reserve. The brokerage house says that during FY22-24, the earnings of AUBANK can be 35 percent CAGR. While RoA/RoE may improve to 2.1%/20.4% in FY24E.
morgan stanley
Brokerage house Morgan Stanley has also kept an overweight rating while recommending investment in AU Small Finance Bank. The brokerage house has given a target of Rs 1675 for the stock. In terms of current price Rs 1162, it can give 42 percent return. The brokerage says that the company’s management is confident about the growth. There is also a steady improvement in asset quality. Loan growth is expected to remain strong going forward.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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