26-Oct-2026 08:58:08
JPM on AU Small BK ; OW, TP Rs 1165
Strong 2QFY27: NII rose by 32% y/y, PPOP rose by 25% y/y & PAT rose by 53% y/y Gross advances growth accelerated to 27.9% y/y AU remains confident of delivering 25% y/y loan growth (2.5x of Nom GDP growth). CASA ratio improved by 70bps q/q to 29.5% With only 30% of the loan book being floating rate, NIM outlook is challenged by a potential rise in deposit costs with improving CASA traction and rising share of unsecured loans providing a partial offset Gross slippages in 2Q declined by 69bps y/y, however, rose by 24bps q/q to 2.62% (JPM calculation), which AU attributed purely to seasonality Credit costs (on assets) declined by 7bps q/q to 0.70%, with 1H credit cost at 72bps (calculated), AU remains on track to deliver ahead of its 90bps guidance for FY27
AU SMALL FINANCE BANK LTD