India's AU Small Finance Bank slides as Q1 results spur margin, asset quality concerns

AU Small Finance Bank

21/07/2025 06:25

** Shares of AU Small Finance Bank AUFI.NS fall as much as 7.5% to 735.2 rupees, marking the steepest intraday drop in six months

** Retail-focused lender reports weak June quarter core performance, with net interest margin falling 40 bps sequentially

** Net interest margins and higher-than-expected delinquencies driven by south-based mortgages and a delayed recovery in microfinance segment, says Nuvama

** Brokerage maintains "reduce" rating, flagging unfavourable risk-reward

** Emkay cuts fiscal 2026 and 2027 earnings estimates by 2–3%; ICICI Securities downgrades stock to "add" from "buy"

** Centrum also downgrades to "add" from "buy", citing valuation concerns that may limit further upside

** The average rating of 25 analysts tracking AUFI is "buy"; median PT is 772 rupees, according to data compiled by LSEG

** AUFI is up 42.2% YTD vs 11.5% gain in the bank index .NSEBANK

 (Reporting by Bharath Rajeswaran in Bengaluru)

 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))