AUBANK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | AUBANK | Market Cap | 73,231 Cr. | Current Price | 978 ₹ | High / Low | 1,080 ₹ |
| Stock P/E | 27.7 | Book Value | 264 ₹ | Dividend Yield | 0.10 % | ROCE | 7.66 % |
| ROE | 14.3 % | Face Value | 10.0 ₹ | DMA 50 | 982 ₹ | DMA 200 | 905 ₹ |
| Chg in FII Hold | 0.82 % | Chg in DII Hold | 0.03 % | PAT Qtr | 832 Cr. | PAT Prev Qtr | 668 Cr. |
| RSI | 40.3 | MACD | -1.60 | Volume | 13,77,083 | Avg Vol 1Wk | 14,01,563 |
| Low price | 682 ₹ | High price | 1,080 ₹ | PEG Ratio | 1.22 | Debt to equity | 8.44 |
| 52w Index | 74.5 % | Qtr Profit Var | 65.2 % | EPS | 35.3 ₹ | Industry PE | 14.8 |
📊 Financials: AU Small Finance Bank (AUBANK) shows moderate fundamentals with ROE at 14.3% and ROCE at 7.66%. Debt-to-equity is high at 8.44, reflecting leveraged operations typical of banks. Quarterly PAT rose to ₹832 Cr. from ₹668 Cr., showing a 65.2% variance. EPS stands at ₹35.3, highlighting steady earnings growth.
💰 Valuation: The stock trades at a P/E of 27.7 compared to the industry average of 14.8, suggesting a premium valuation. P/B ratio is ~3.7 (Price ₹978 / Book Value ₹264). PEG ratio of 1.22 indicates fair growth-adjusted valuation. Intrinsic value appears slightly lower than current price, making entry moderately attractive only at lower levels.
🏢 Business Model: AU Small Finance Bank focuses on retail banking, SME lending, and financial inclusion. Its competitive advantage lies in strong distribution, customer-centric approach, and rapid growth in underserved markets. Overall health is stable, supported by earnings growth, though leverage remains high.
📈 Entry Zone: A good entry zone would be near ₹850–900, closer to its DMA 200 and below current highs. Long-term holding is favorable given strong growth prospects, but investors should be cautious about high leverage and valuation premium.
Positive
- 📌 Strong quarterly PAT growth (65.2% variance)
- 📌 EPS of ₹35.3 reflects steady earnings
- 📌 Increase in FII holdings (+0.82%)
- 📌 Expanding presence in retail and SME banking
Limitation
- ⚠️ High debt-to-equity ratio (8.44)
- ⚠️ P/E ratio (27.7) above industry average (14.8)
- ⚠️ Dividend yield of 0.10% is very low
- ⚠️ ROCE (7.66%) reflects modest efficiency
Company Negative News
- 📉 High leverage raises risk exposure
Company Positive News
- 📈 Increase in FII holdings (+0.82%)
- 📈 Consistent quarterly profit growth
Industry
- 🏦 Industry PE at 14.8, lower than AUBANK’s valuation
- 📊 Banking sector benefits from rising credit demand and financial inclusion initiatives
Conclusion
🔎 AUBANK is fundamentally strong with consistent earnings growth and expanding market presence. However, high leverage and premium valuation are concerns. Entry is advisable near ₹850–900. Long-term holding is favorable given growth prospects, but investors should monitor leverage and efficiency closely.
Would you like me to also prepare a valuation comparison chart between AU Small Finance Bank and banking industry peers to highlight its premium positioning?