Buzzing Stock: Shares of AU Small Finance Bank have rallied 25% this month

The bank has been one of the top performers on the S&P BSE 500 so far this year.

Shares of AU Small Finance Bank have been one of the top performers on the S&P BSE 500 so far after rallying 25.28% in January 2022. Let us understand the drivers behind the stock price movement.

The appreciation in share price to a large extent comes on the back of a strong provisional update by the lender for Q3FY22. It reported sequential growth in asset under management (AUM) of 10.6% and a 26.5% YoY growth to Rs 42,027 crore in the October-December quarter (Q3FY22).

The bank saw strong surge in advances, witnessing a growth of 11.9% QoQ and 33.4% YoY with a significant improvement in the business environment supported by the festive season. Disbursements were up by 59% QoQ and 33% YoY at Rs 9,152 crore with strong traction in the credit card business.

On the deposit front too, the rise remains strong, led by robust CASA growth, resulting in a further improvement in the Current account Savings Account (CASA) ratio. Total deposits were up by 13% QoQ from Rs 39,034 crore reported in the quarter ended September 2021. On a YoY basis, there was a 49% growth in deposits from Rs 29,708 crore in Q3FY21. The CASA ratio improved to 39% from 30% in September 2021. On the asset quality front, collection efficiency remains strong (over 100%), which is likely to result in an improvement in asset quality ratios, providing further comfort.

Incorporated as a vehicle finance company in 1996, AU Small Finance Bank now offers a comprehensive and tailor-made range of products (both asset and liability) and services to cater to the needs of various businessmen (SME and MSME) and other middle and low-income customers. The bank has a presence in 15 states and two union territories, with 794 branches, 470 ATMs, 31 asset centres and 6,59,904 loan accounts.

At 2.50 pm on Wednesday, the stock of AU Small Finance Bank Limited was seen trading at Rs 1298.15, down marginally by 0.01 % or Rs 0.15 per share as against a 0.85% gain on the benchmark index. The 52-week high of the scrip is recorded at Rs 1,389 and the 52-week low at Rs 843 on the BSE.