AU Small Finance Bank Faces Steepest Single-Day Stock Drop Since August 2021
AU Small Finance Bank witnessed a significant 10% drop in its shares on Monday, marking the largest single-day decline since August 2021. The dip followed a deterioration in the company’s asset quality during the December quarter.
The Gross NPA rose to 1.98% from 1.91% in the previous quarter, while Net NPA increased to 0.68% from 0.6%. The company’s net profit of ₹375 crore fell short of the CNBC-TV18 poll of ₹411 crore due to a 39% quarter-on-quarter surge in provisions.
Citi, maintaining a “neutral” stance, lowered its price target to ₹790 from ₹832, attributing the asset quality decline to credit card stress and write-offs of ₹120 crore. The bank faces pressure on Core Net Interest Margin and is expected to settle at or below its guidance in the March quarter.
Out of 27 analysts tracking AU Small Finance Bank, 10 recommend “buy,” 10 recommend “sell,” and 7 suggest “hold.” Currently, the shares are locked in a 10% lower circuit at ₹637.1, reflecting a 15% decline over the last four trading sessions.
