Today I will discuss the AU Small Finance bank target with a technical pattern. This is just a pattern target for education purposes and remember it is not a stock buying & selling recommendation. It is just an educational purpose to learn how to pick a stock with technical and fundamental analysis. Please take an investment decision after consulting with your investment advisor. I am not SEBI registered, so do not follow me as a stock advisor. Just learn from me how to do technical and fundamental analysis.
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AU Small Finance Bank has recently made a significant technical move that has caught the attention of market enthusiasts. The stock has broken out above the critical price level of ₹610.50, which also coincides with its 200-day moving average (200MA). This breakout is a strong bullish signal, suggesting that the stock is poised for an upward trend.
Currently trading at ₹665.45, the stock shows promising momentum, with a technical target set at ₹754. This indicates a substantial potential upside from the current market price. The breakout above the 200MA is not just a number; it symbolizes a shift in market sentiment, where buyers are stepping in with confidence, pushing the stock into a new phase of growth.
For investors, this breakout could be a golden opportunity to ride the wave of optimism. The technical target of ₹754 reflects not just a number but a story of resilience and potential. As the stock charts its course upward, it’s a testament to the strength of AU Small Finance Bank and the faith of its investors.
Key Reasons to Buy AU Small Finance Bank: AU Small Finance bank target
- Easing Credit Costs: The bank expects a significant improvement in credit costs starting from H2FY26, driven by better collection efficiency in microfinance (MFI) and credit card portfolios. Credit costs are projected to decline to 85-90 bps in FY26 and further improve to 75-80 bps by FY27.
- Resilient Margins: Despite near-term pressure on Net Interest Margins (NIMs) due to a repo rate cut, AUSFB is well-positioned to stabilize margins between 5.7-5.8% over FY26-27E, supported by its 70% fixed-rate loan portfolio.
- Strong Deposit Growth: The bank continues to build a solid deposit franchise, with deposits growing by 43% YoY in FY25, ensuring a stable funding base.
- Future Outlook: AUSFB is on track to achieve its FY27 target Return on Assets (RoA) of 1.8%, bolstered by controlled operating expenses and improved asset quality.
Fundamental Snapshot:AU Small Finance bank target
To guide your investment, here’s a table summarizing the key financial metrics of AU Small Finance Bank:
| Metric | FY25 | FY26E | FY27E |
|---|---|---|---|
| Net Interest Income (NII) | INR 8,012 Cr | INR 10,108 Cr | INR 12,678 Cr |
| PAT (Net Profit) | INR 2,106 Cr | INR 2,818 Cr | INR 3,815 Cr |
| EPS (INR) | 28.3 | 37.9 | 51.2 |
| Adjusted BVPS (INR) | 219.9 | 255.4 | 302.5 |
| RoA (%) | 1.6 | 1.6 | 1.8 |
| P/ABV (x) | 2.8 | 2.4 | 2.0 |
These figures clearly highlight the bank’s growth trajectory and value proposition.
Strategic Growth Drivers
- Controlled Operating Expenses: AUSFB has successfully reduced its Cost-to-Income (C-I) ratio to ~54.7% in FY25 and aims to maintain it below 60% in FY26, ensuring operational efficiency.
- Balanced Credit Growth: The bank expects credit growth to remain strong, delivering a CAGR of ~21% over FY25-27, driven by secured loans and selective growth in MFI and credit card segments.
- Universal Banking License: AUSFB anticipates receiving a universal banking license this year, which will strengthen its market positioning and deposit mobilization efforts.
Final Thoughts
AU Small Finance Bank offers a unique blend of growth, resilience, and strategic vision, making it a compelling choice for savvy investors. With easing credit costs, robust deposit growth, and an ambitious roadmap for profitability, AUSFB is well-poised to reward its shareholders in the coming years.
If you’re considering expanding your investment portfolio, now is the perfect time to capitalize on this promising opportunity. Don’t let this stock fly under your radar—invest in AU Small Finance Bank today and secure your financial future.
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Disclaimer: The information provided in this blog is for educational and informational purposes only and should not be construed as investment advice. I am not registered with the Securities and Exchange Board of India (SEBI) or any other regulatory authority. Please conduct your own research or consult with a SEBI-registered investment advisor before making any investment decisions. Investments in the stock market are subject to market risks; past performance is not indicative of future results. The author does not guarantee the accuracy, reliability, or completeness of the information provided herein.
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