Shares of AU Small Finance Bank surged over 3% in trade after brokerage firm Goldman Sachs initiated coverage on the stock. The stock made an intraday high of Rs 722.85. As of 9:30 AM, the stock was up 2.6% at Rs 706 on the NSE. Goldman Sachs has initiated a “Buy” rating on AU Small Finance Bank (AUSFB) with a price target of ₹831, representing a 20% upside from its September 4 closing price of ₹687.75.
The brokerage firm believes that AUSFB is well-positioned for its next phase of growth, with sector-leading EPS growth on the horizon.
Goldman forecasts a 27% CAGR in EPS for AUSFB over FY24-FY27, driven by improving Return on Assets (ROA) and robust loan growth in the bank’s commercial retail portfolios, which accounted for approximately 70% of its loans in Q1FY25. This loan growth is expected despite the ongoing normalization in the credit cycle.
