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Buy AU Small Finance Bank: target of Rs 1500: Sharekhan

Sharekhan is bullish on AU Small Finance Bank has recommended buy rating on the stock with a target price of Rs 1500 in its research report dated March 10, 2021.

March 12, 2021 / 08:47 AM IST
 
 
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Sharekhan's research report on AU Small Finance Bank


AU Small Finance (AUSFB) has announced its plans to raise equity funds via Qualified Institutional Placement (QIP), which will provide growth capital, help the bank on its way to become a Universal Bank. As per our calculations, Tier-1 ratio will likely increase by ~240 bps, equity dilution to be small (~1.6%), but the book value (Calculated) may increase by ~9.7%. AUSFB is available at 6.1x/4.9x its FY2022E/FY2023E ABPVS; expect bank to report healthy ROA/ROE to improve to 1.9%/18.1% in FY2023E from 1.8%/17.9% in FY2020.



Outlook


We maintain Buy on the stock with a revised price target (PT) of Rs. 1,500.


For all recommendations report, click here


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first published: Mar 12, 2021 08:47 am

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