India's AU Small Finance loses 4% on valuation concerns

AU Small Finance Bank

26/04/2023 06:17

** Shares of AU Small Finance Bank Ltd  AUFI.NS  lost as
much as 4.44%, their steepest intraday decline in six weeks, to
630.85 rupees
    ** The banking and financial services provider on Tuesday
reported a near 23% jump in net profit to 4.25 bln rupees ($51.9
mln) on lower tax and provisions
    ** Growth was largely driven by the commercial banking
portfolio, which grew ~56% YoY
    ** While analysts termed the earnings performance 'strong,'
they flagged that the valuations remained expensive
    ** Kotak Institutional Equities downgrades stock to "sell"
from "reduce," citing high valuations
    ** Investments in  franchise-building  activities and  new 
businesses likely to drag  medium-term  profitability, say
analysts at HDFC Securities    
    ** Of the 23 analysts tracking AUFI, 12 have "buy" rating,
five "sell" and six "hold;" median TP is 703 rupees 


($1 = 81.9700 Indian rupees)

 (Reporting by Ashna Teresa Britto in Bengaluru)
 ((AshnaTeresa.Britto@thomsonreuters.com ; ( +91 8078332441))