AU Small Finance Bank Limited provides banking services to low and middle-income individuals and micro, small and medium enterprises in India. Established in 1996 as a vehicle financing company, it converted into a small finance bank in 2017. The bank has seen tremendous growth over the past five years but is currently facing some headwinds.
Current Share Price of Au Small Finance Bank :
As of January 25, 2024, AU Small Finance Bank’s share price was ₹708.05. However, by January 29, 2024, it plummeted by 10%, hitting ₹637.1, marking its most significant single-day decline since August 2021. The share price on the NSE stood at ₹644.60 on the same date. Over the past year, the stock ranged from a high of ₹813.40 to a low of ₹548.15. Additionally, on January 29, 2024, the share price was reported as ₹708.05, On the BSE, a total of 80,794 shares were traded.
Please note that share prices are dynamic and can change throughout the trading day. It’s advisable to check the latest share price from a reliable financial source before making any investment decisions.
| Ratings | Current | 1 W Ago | 1 M Ago | 3 M Ago |
| Strong Buy | 2 | 2 | 2 | 2 |
| Buy | 7 | 8 | 8 | 7 |
| Hold | 7 | 6 | 6 | 7 |
| Sell | 6 | 6 | 6 | 6 |
| Strong Sell | 1 | 1 | 1 | 1 |
52-Week High/Low of AU Small Finance Bank Share:
The 52-week high and low for AU Small Finance Bank shares are as follows:
Metric | Value |
|---|---|
| 52-Week High | ₹813.00 |
| 52-Week Low | ₹548.15 |
| Current Price | ₹644.60 |
As of January 29, 2024, the share price of AU Small Finance Bank is ₹644.60
The 52-week high and low represent the highest and lowest prices at which the stock has traded in the past 52 weeks or nearly a year.
Au Small Finance Bank share price Live: Stock Peers
| Name | Latest Price | Change | % Change | 52W High | 52W Low | Mkt. Cap |
|---|---|---|---|---|---|---|
| IDFC First Bank | 83.0 | 2.88 | 3.59 | 100.74 | 52.11 | 54930.41 |
| UCO Bank | 43.6 | 2.39 | 5.8 | 48.5 | 22.26 | 52127.98 |
| Au Small Finance Bank | 640.8 | -67.25 | -9.5 | 813.0 | 548.15 | 42725.02 |
| Central Bank Of India | 57.3 | 2.94 | 5.41 | 57.53 | 22.25 | 49741.78 |
| Bank Of Maharashtra | 55.19 | 1.79 | 3.35 | 54.87 | 22.8 | 37145.61 |
Market Capitalization of AU Small Finance Bank:
As of January 29, 2024, the market capitalization of AU Small Finance Bank is ₹47,881 crore (approximately $5.69 billion)
Another source reports the market cap of AU Small Finance Bank as ₹48,864.01 crore as of the same date
The market capitalization of a company is the total market value of its outstanding shares and is calculated by multiplying the current stock price by the number of outstanding shares.
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P/E Ratio and P/B Ratio
Even after the correction, AU Small Finance Bank’s valuation multiples remain elevated:
P/E (Price-to-Earnings) Ratio:
The latest P/E ratio is reported as 29.81x
Another source mentions the P/E ratio as 29.5
A different source reports the latest twelve months’ P/E ratio as 31.7x, with an average of 35.4x for fiscal years ending March 2019 to 2023
P/B (Price-to-Book) Ratio:
The P/B ratio of AU Small Finance Bank Ltd. is reported as 4.41 times as of January 10, 2024, representing a 3.55% premium to its historical 5-year average of 4.26 times
| Ratio | Value |
| P/E Ratio | 29.81x |
| 29.5x | |
| 31.7x (LTM) / 35.4x (average FY2019-2023) | |
| P/B Ratio | 4.41x (as of January 10, 2024) |
These ratios are important valuation metrics used by investors to assess the company’s stock price in relation to its earnings and book value. They provide insights into the market’s expectations for the company’s future performance and growth prospects.
Revenue Growth & Earning Growth
| Metric | Information |
|---|---|
| Revenue Growth Rate | 33.79% per year |
| Earnings Growth Rate | 26% per year |
| EPS Growth Rate | 19.3% per year |
| Return on Equity | 13.5% |
| Forecasted Growth Rate | Earnings: 21.4% per annum<br>Revenue: 22.6% per annum<br>EPS: 19.4% per annum |
| Net Margins | 25.6% |
| EBIT Margins | Maintained stability while growing revenue by 36% to ₹57 billion |
| Operational Revenue | Lower than the previous year, potentially distorting margin analysis |
These figures highlight AU Small Finance Bank’s significant revenue and earnings growth over the past five years, as well as its projected growth rates.
Long-Term Growth Drivers Intact
While near-term headwinds persist, AU Small Finance Bank’s long-term growth outlook remains positive, backed by:
- Strong presence in the high-potential microfinance sector
- Fast-growing retail asset portfolio
- Stable margins while delivering over 30% revenue growth
- Seasoned management team
If asset quality pressures subside and the bank manages to grow earnings by around 20% annually, there is potential for further re-rating.
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Price Prediction:
| Source | Prediction |
|---|---|
| Source 1 | Short-term downtrend with a target price range of ₹686.40 to ₹724.65 |
| Source 2 | Forecasted annual growth rates: 21.2% for earnings, 22.4% for revenue, 19.3% for EPS |
| Source 3 | Predicts a drop in stock price from ₹708.05 to ₹547.97, with a change of -22.61% |
These predictions are based on different models and assumptions and may not be accurate. Investors should conduct their own research and analysis before making any investment decisions.
Profitability of AU Small Finance Bank Share:
| Aspect | Information |
|---|---|
| Earnings Growth Rate | 24.2% annually over the past five years, compared to 38% for the banking industry |
| Revenue Growth Rate | 26.6% annually |
| Return on Equity | 13.5% |
| Net Margins | 25.6% |
| Market Capitalization | $5.17 billion as of January 2024 |
| Dividend Yield | 0.14% based on current share price |
| Stable EBIT Margins | Maintained stability while growing revenue by 36% to ₹57 billion |
These indicators collectively demonstrate AU Small Finance Bank’s strong profitability and financial performance.
Positive and Negative Aspects
Positive Points:
- High growth potential with an excellent balance sheet.
- Long-term credit rating of “AA-/Stable” from various rating agencies.
- Shareholders have received an annual Total Shareholder Return (TSR) of 19% over the past five years.
- Maintained stable EBIT margins despite a 36% revenue growth to ₹57 billion.
- Strong presence in the microfinance segment, poised for future growth.
Negative Points:
- High P/E ratio of 29.81 and P/B ratio of 4.09.
- Recent negative trend in stock price, with a share price of ₹708.05 as of January 25, 2024.
- The decline in revenue from operations compared to the previous year potentially distorts margin analysis.
- Low share of current account savings account (CASA) in overall business, impacting profitability.
In summary, while AU Small Finance Bank presents opportunities for growth and has maintained a strong financial position, concerns such as high valuation metrics and recent stock performance warrant careful consideration for potential investors.
Conclusion:
In summary, while AU Small Finance Bank has several positives like stable margins, high growth and strong credit ratings, prevailing valuations limit the margin of safety. Recent increases in stress levels also warrant a cautious view. Long-term-oriented investors could consider exposure if significant corrections from current levels materialize. Near-term investors are better off waiting on the sidelines.