Mr. Jaikishan Parmar - Sr. Equity Research Analyst, Angel Broking Ltd
AU Small finance overall reported a good set of numbers for Q2FY21. Advance grew 9.8% YoY and 3.7% QoQ. NII reported a very strong growth of 24% YoY, Primarily owing to the lower cost of funds. Other income jumped due to stake sale. Bank carrie Rs.278 Cr of COVID-19 related provisions which constitute ~1% of Gross Advances; Based on activity levels of complete Moratorium cases and collection feedback, AU SFB has not made any further COVID-19 related provisions. On the asset quality front, Gross and net NPAs improved to 1.54% and 0.45%, respectively. Strong Provision coverage of 71%. Moratorium book closed 5.5% in Aug from 11%in Q1FY21. Management has indicated a similar level in Q1FY21.
On the liability front, deposit momentum continues, CASA improved 500bps YoY to 21%. Disbursement momentum is back to the pre-covid-19 level. AU SFB is trading at a higher valuation compared to listed peers however, asset quality stability and quality growth are the key positive for a higher valuation.
Shares of AU Small Finance Bank Ltd was last trading in BSE at Rs.781.2 as compared to the previous close of Rs. 799.3. The total number of shares traded during the day was 16261 in over 1220 trades.
The stock hit an intraday high of Rs. 808 and intraday low of 775.3. The net turnover during the day was Rs. 12849382.