AU Small Finance Bank shares gained over 2% in morning trade following a rating upgrade by Nomura. The brokerage raised its rating on the bank from “Reduce” to “Neutral” and increased the target price from ₹610 to ₹750. As of 9:48 AM, the shares were trading 2.15% higher at Rs 879.85.
Nomura highlighted the bank’s strong performance in its recent results, with a profit after tax of ₹560 crore, slightly down 2% YoY but 12% above estimates. The bank showed healthy growth in net interest margins (NIMs), fee income, and controlled credit costs, while asset quality is improving, supporting a positive growth outlook.
Looking ahead, Nomura revised AU Small Finance Bank’s FY26-28 EPS estimates up by 8–12%, citing higher NIMs, loan growth, and lower credit costs. The brokerage expects the bank to deliver an average RoA of 1.6%, RoE of 16%, and EPS CAGR of around 29% over FY26-28.
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