Buy Au Small Finance Bank, target price Rs 1100: Motilal Oswal

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Buy Au Small Finance Bank, target price Rs 1100:  Motilal Oswal


Motilal Oswal has buy call on with a target price of Rs 1100. The current market price of Au Small Finance Bank Ltd. is Rs 870.05.

Au Small Finance Bank Ltd., incorporated in the year 1996, is a banking company (having a market cap of Rs 26689.53 Crore).

Financials
The Bank reported a Gross Non Performing Assets (Gross NPAs) of Rs 302.74 Crore (.00 % of total assets) and Net Non Performing Assets (Net NPAs) of Rs 72.69 Crore (.00% of total assets). For the quarter ended 31-12-2020, the company reported a Standalone Interest Income of Rs 1006.51 Crore, up 6.53 % from last quarter Interest Income of Rs 944.78 Crore and up 13.95 % from last year same quarter Interest Income of Rs 883.25 Crore. The bank reported net profit after tax of Rs 479.02 Crore in latest quarter.


Investment Rationale
AUBANK reported strong earnings, led by robust treasury performance. It prudently utilized these gains to create higher provisions. Collection efficiency has reached near normalcy, while controlled restructuring and provisions buffer provides comfort over asset quality. On the business front, retail deposit mix continues to improve, while AUM growth has shown healthy recovery.


Promoter/FII Holdings
Promoters held 29 per cent stake in the company as of Sept 30, 2020, while FIIs held 30.6 per cent, DIIs 15.6 per cent and public and others 24.9 per cent.





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