AU Small Finance Bank rises 2% on stable asset quality of vehicle financing segment

Shares of AU Small Finance Bank gained 1.6 percent intraday on September 18 after brokerage firm Citi said the company has a stable asset quality of vehicle financing segment.

The brokerage has maintained buy call on AU Small Finance Bank with a target price at Rs 720 per share, implying 12.5 percent potential upside from current levels.

“Asset quality of vehicle financing segment will be largely stable, but the growth will likely slow from the more than 40 percent level of FY19,” Citi said, adding used vehicle and MSMEs are other large segments offering growth for the company.

Fuel price is supportive so far, but the outlook is key, the global brokerage house said.

AU Small Finance Bank reported 40 percent growth in loans, 56 percent growth in profit of Q1FY20 with stable asset quality. Its net interest income increased by a whopping 38 percent YoY in Q1.

Asset under management grew by 44 percent in quarter ended June 2019, disbursement rose by 40 percent and deposits were up around 100 percent YoY while it added around 1.6 lakh new deposit and loan accounts in the quarter.

The stock was quoting at Rs 645.10, up Rs 5.00, or 0.78 percent on the BSE at 1044 hours IST.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

[“source=moneycontrol”]