Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

AU Small Finance Bank - Attrition at top level remains key challenge; business momentum sustained in Jul/Aug'21 - ICICI Securities

Posted On: 2021-09-02 12:55:48 (Time Zone: UTC)

AU Small Finance Bank (AU SFB) hosted an update call to address the key concern around higher attrition at the top-management level, triggered by resignation of Chief Risk Officer and Head of Internal Audit. The call was led by Chairman of the Board - Mr. Raj Vikas Verma, Chairman of NRC Committee - Mr. M S Sriram and MD & CEO Mr. Sanjay Agarwal. Key takeaway was the Board taking the ownership, ensuring no lapses in internal control and processes, and highlighting the strength of internal controls & strong risk management practices. While it believes attrition is the key challenge of late, it is more due to location issue (few key positions are based out of Jaipur) rather than culture issue. AU SFB remains committed in addressing this concern and is open to retain talent by offering employees the option of working remotely, helping them in settling down in Jaipur etc. Amid economic challenges for the industry, AU SFB's ability to sustain asset quality and manage attrition will be key monitorables. Maintain HOLD with revised TP of Rs1,200 (earlier: Rs1,250) to factor near-term concern around attrition.

- Internal recruitment for CRO position. Recent resignation of CRO Mr. Alok Gupta and Head of Internal Audit Mr. Sumit Dhir raised concerns over increasing attrition at top level. Notably, outgoing CRO, Mr. Alok Gupta replaced Mr. Mayank Markanday (the then-CRO) who has taken charge as Chief of Credit Card business within the organization after serving as CRO from August 2016 to March 2021. It appointed Mr. Deepak Jain as new CRO, who has been with AU for >11 years in positions of CFO and COO. It highlighted that the key reason for attrition is a location issue than cultural issue given both the roles, CRO & Head of Internal Audit, were based out of Jaipur.

- Attrition remains the key challenge, but the SFB is committed to manage it in the best possible manner. The Board acknowledged the challenges in retaining talents due to locational issue with Jaipur being its corporate headquarter and professionals joining the bank belonging to other cities. However, with its fully digitised operations and processes, it does offer work from remote location option to minimise attrition arising out of geographical constraints. While we note during build-out phase (>5 years as SFB) attrition does remain high, retaining talent to build sustainable long-term business model is equally important. Thus, HR management over the next couple of quarters is the key monitorable.

- Business momentum sustained in Aug'21. During the call, the management stated business momentum sustained in Jul/Aug'21, in terms of disbursements and collections.

- No divergence in audit report. The Board also highlighted that the bank has gone through three audit cycles by the regulator (RBI) and no material observation has been flagged off which requires disclosures.

- Key risks. Upside risk - lower-than-anticipated provisions in Q2FY22, and downside risk - further attrition at top level.

Shares of AU Small Finance Bank Limited was last trading in BSE at Rs. 1171.35 as compared to the previous close of Rs. 1155.15. The total number of shares traded during the day was 95512 in over 4389 trades.

The stock hit an intraday high of Rs. 1190.45 and intraday low of 1131.95. The net turnover during the day was Rs. 110890989.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Automobile Sector - Monthly Quick View - Aug'21 - Mixed Performance across Segments - Reliance Securities

Axis Securities initiating coverage on ICICI Securities

Company Update - Minda Corporation - Q1FY22 - ICICI Direct

Quant Pick - PVR Ltd - ICICI Direct

Quant Pick - ONGC - ICICI Direct

Peak in the headline wholesale inflation is behind us - WPI August 2021 - Acuité Ratings

Sansera Engineering - IPO - Strong Outlook with Steady Cash Flow - Reliance Securities

APL Apollo Tubes - Journey from a semi-commodity player to a branded one - HDFC Securities

Nazara Technologies Ltd - Upbeat in medium-term, Uncertain over Long-term - YES Securities

IPO Review - Sansera Engineering Ltd - ICICI Direct

Overall index is still 0.3% lower than the pre-pandemic levels - IIP July 2021

YES SECURITIES on Monthly General Insurance & Mutual Funds Data

India urban logistics spaces expected to cross 7 million sq. ft by 2022: JLL

Neogen Chemicals - Breaking into the next orbit with a bang - HDFC Securities

Gladiator Stocks - Bharti Airtel Ltd - ICICI Direct

Gladiator Stocks - V-Guard - ICICI Direct

Balkrishna Industries - Industry export growth accelerates - ICICI Securities

HDFC Life Insurance - Exide Life Acquisition - Maintain ADD - YES Securities

Gladiator Stocks - Grindwell Norton - ICICI Direct

Gladiator Stocks - Godrej Properties - ICICI Direct

Monthly Auto Volumes - August 2021 - ICICI Direct

Stock Tales - Easy Trip Planners - ICICI Direct

IPO Review - Vijaya Diagnostic Centre Ltd - ICICI Direct

Gladiator Stocks - State Bank of India - ICICI Direct

Gladiator Stocks - PNC Infratech - ICICI Direct

Vijaya Diagnostic Centre Ltd - IPO Note - YES Securities

Consumer Durables Sector - Lockdown mars performance yet again - Institutional Research Desk at HDFC Securities

75% of the employees today want to be in office at least once a week as compared to 52% in October 2020: JLL

Gladiator Stocks - Safari Industries - ICICI Direct

Gladiator Stocks - Interglobe Aviation - ICICI Direct

IPO Review - Ami Organics Ltd - ICICI Direct

Q1FY22 GDP - 31st Aug 2021 - Acuité Ratings & Research

Avanti Feeds - Higher input prices hurt margins - ICICI Securities

Company Update - Restructuring - Aarti Industries - ICICI Direct

Q1FY22 Company Update - MM Forgings - ICICI Direct

Company Update - Arvind Fashions - ICICI Direct

Zomato - Can margins and multiples surprise? - ICICI Securities

Ujjivan Small Finance Bank - Top management change and lumpy provisioning concern to weigh on valuation in near term - ICICI Securities

Bharat Dynamics - Guided missile systems to drive orderbook and profit growth - ICICI Securities

Economy - Continued accommodation necessary despite inflationary risks: MPC minutes - ICICI Securities

InterGlobe Aviation - Annual report analysis: Liquidity management remains the mainstay in anticipation of traffic recovery - ICICI Securities

General insurance - Health remains dominant growth driver; Strong all-round performance by Bajaj Allianz - ICICI Securities

Earnings Wrap Q1FY22: Resilient earnings, limited impact of second Covid wave - ICICI Direct

Fine Organic Industries Results Review - In-line performance - HDFC Securities

Power Plus Sector Update - July witnessed strong ~10% generation growth - HDFC Securities

Information Technology Sector Update - 'Hit Refresh' - HDFC Securities

Maintain ADD on JK Cement - Healthy performance - HDFC Securities

Maintain BUY on Star Cement - Margin recovers on pricing gain - HDFC Securities

Maintain BUY on Sadbhav Engineering - Long road to recovery - HDFC Securities

Poonawalla Fincorp - Business transformation on cards; a turnaround play - ICICI Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020