Q3 FY21 Result Update - AU Small Finance Bank - YES Securities

(Rating: ADD, TP: Rs 950, Upside 8.8%)

- Growth is back and stress well provided for

- We expect 23-25% AUM growth for AU SFB over FY21-23 and a 2%+ RoA and 18%+ RoE delivery.

- Upgrade the stock to ADD from Reduce rating due to much better visibility on growth and credit cost post the Q3 results. Notably, the stock did underperform the market as envisaged when we tactically downgraded in Q1 FY21 result update (CMP was Rs792 then).

- We now anchor valuation to FY23 ABV which stands at 3.4x, palatable for a high-quality franchise on RoE expansion path. We upgrade 12m target to Rs950

Shares of AU Small Finance Bank Ltd was last trading in BSE at Rs.873.05 as compared to the previous close of Rs. 869.45. The total number of shares traded during the day was 17448 in over 1265 trades.

The stock hit an intraday high of Rs. 890 and intraday low of 863. The net turnover during the day was Rs. 15237126.

Source : Equity Bulls

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