India's AU Small Finance Bank rises; brokerage upbeat on growth prospects

AU Small Finance Bank

23/09/2025 10:56

** Shares of lender AU Small Finance Bank  AUFI.NS gain 3.7% to 731.9 rupees; set for best day since early-June

** Brokerage Motilal Oswal says AUFI's earnings to accelerate from the second half of FY26 onwards; expects loan CAGR to be sustained at 24% over FY26-28

** Says recovery in credit costs and strong loan growth will aid earnings for co

** Estimates a 33% earnings CAGR for AUFI; expects growth trends in the vehicle business to recover from Q3FY26, aided by GST tax cuts and festival demand

** Says co's NIM faces near-term pressure due to loan repricing, however, improvement in asset mix and decline in funding costs to aid margins from HY2

** Rates AUFI "buy," PT at 875 rupees - reflecting a ~24% upside on last close

** Stock rated "hold" on avg, median PT at 773 rupees - data compiled by LSEG

** YTD, stock up ~31%

 (Reporting by Manvi Pant in Bengaluru)

 ((Manvi.Pant@thomsonreuters.com; +918447554364;))