AU Small Finance Bank Q2 Results: Profit Rises 30% On Improvement In Interest Income

AU Small Finance Bank Ltd.’s profit rose in the second quarter of fiscal 2025, beating analysts' estimates.

The lender’s standalone net profit rose 42.2% year-on-year to Rs 571 crore in the quarter-ended September, according to an exchange filing on Wednesday. Analysts polled by Bloomberg estimated a net profit of Rs 496 crore.

Net interest income, or core income, for the lender increased 58% year-on-year to Rs 1,974 crore. Other income grew 57% year-on-year to Rs 638 crore. This was driven by fee income, third-party product distribution and credit cards, according to the press release.

Asset quality for the lender deteriorated, with the gross non-performing asset ratio increasing 20 basis points quarter-on-quarter to 1.98%. The net NPA ratio also worsened to 0.75%, as compared to 0.63% in the previous quarter.

Total income rose to Rs 4,549 crore in the quarter under review from Rs 2,957 crore in the same period a year ago.

Net interest margin increased to 6.1% from 5.5% at the end of September 2023.

The capital adequacy ratio of the bank decreased to 18.51% from 22.4% at the end of September 2023.

The bank filed an application with the Reserve Bank of India for voluntary transition to Universal Bank on Sept. 3, it said.

The shares of AU Small Finance Bank closed higher on Thursday. The shares rose as much as 2.65% during the day to Rs 655.45 apiece on the NSE. The stock closed 2.12% higher at Rs 652.05 per share. This compares with a 0.28% decline in the benchmark Nifty 50. It has fallen 6.24% in the last 12 months and 17.04% year-to-date.

Out of 28 analysts tracking the company, 16 maintain a 'buy' rating, eight recommend a 'hold,' and four suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 14.5%.

(With Inputs From PTI)