AUBANK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | AUBANK | Market Cap | 76,030 Cr. | Current Price | 1,016 ₹ | High / Low | 1,080 ₹ |
| Stock P/E | 28.8 | Book Value | 264 ₹ | Dividend Yield | 0.10 % | ROCE | 7.66 % |
| ROE | 14.3 % | Face Value | 10.0 ₹ | DMA 50 | 970 ₹ | DMA 200 | 891 ₹ |
| Chg in FII Hold | 0.82 % | Chg in DII Hold | 0.03 % | PAT Qtr | 832 Cr. | PAT Prev Qtr | 668 Cr. |
| RSI | 57.9 | MACD | 28.0 | Volume | 19,55,155 | Avg Vol 1Wk | 28,60,372 |
| Low price | 655 ₹ | High price | 1,080 ₹ | PEG Ratio | 1.27 | Debt to equity | 8.44 |
| 52w Index | 85.0 % | Qtr Profit Var | 65.2 % | EPS | 35.3 ₹ | Industry PE | 22.4 |
📈 Positive
- Market capitalization of ₹76,030 Cr. provides scale and stability in the banking sector.
- Strong ROE (14.3%) highlights profitability and efficient equity utilization.
- EPS of ₹35.3 supports valuation strength.
- Quarterly PAT growth (+65.2%) shows strong earnings momentum (₹832 Cr. vs ₹668 Cr.).
- FII holdings increased (+0.82%), reflecting foreign investor confidence.
- Stock trading above DMA 50 (₹970) and DMA 200 (₹891), confirming bullish trend.
⚠️ Limitation
- Debt-to-equity ratio of 8.44 is very high, typical for banks but adds leverage risk.
- ROCE (7.66%) is relatively weak compared to peers.
- Dividend yield of 0.10% is negligible, limiting income support.
- P/E of 28.8 is above industry average (22.4), showing moderate overvaluation.
- RSI at 57.9 indicates nearing overbought territory.
- DII holdings increased only marginally (+0.03%), showing weak domestic institutional support.
🚨 Company Negative News
- High leverage remains a structural risk.
- Valuation multiples above industry average raise concerns of limited upside.
- Domestic institutional participation remains muted.
🌟 Company Positive News
- PAT improved significantly, showing strong earnings growth.
- MACD positive (28.0), reinforcing bullish momentum.
- High trading volume (19.5 lakh vs avg 28.6 lakh) indicates strong liquidity.
🏭 Industry
- Industry P/E of 22.4 highlights AUBANK’s premium valuation.
- Banking sector growth supported by credit expansion and financial inclusion.
- Sector remains cyclical, requiring consistent profitability for sustained valuation.
📝 Conclusion
AUBANK is moderately overvalued but fundamentally strong, with robust earnings growth and profitability. High leverage remains the key risk.
🔑 **Entry Zone:** ₹950–₹980, closer to DMA 50 and valuation comfort.
📌 **Long-term Holding Guidance:** Suitable for medium-to-long term (3–5 years) if earnings momentum continues and leverage remains manageable. Risk lies in high debt-to-equity and moderate overvaluation; maintain strict stop-loss around ₹940.
This positions AUBANK as a fundamentally strong candidate with valuation risks. Would you like me to extend this into a sector overlay benchmarking (AUBANK vs peers like RBL Bank, Federal Bank, and IDFC First Bank) to highlight relative valuation and efficiency gaps?