AU Small Finance Bank dips 2% as Citi puts sell rating after Q3 earnings

Representative image

AU Small Finance Bank shares fell nearly 2 percent intraday Monday as global brokerage house Citi assigned sell rating on the stock after Q3 earnings.

“Company’s Q3 net profit was below estimate due to lower non-interest income. We cut earnings estimates by 2 percent / 5 percent for FY19/20 for less fees & costs,” the brokerage said.

Hence, it has sell call on the stock but raised price target to Rs 535 from Rs 490 earlier.

Company’s profit for December quarter grew by 21 percent year-on-year to Rs 95.33 crore and net interest income increased by 39 percent to Rs 348 crore with loan portfolio growth of 62 percent YoY.

“In asset, growth remains intact led considerably by Vehicle and SBL MSME loans alongside stable asset quality. We are gradually passing on the increase in our cost of funds and sustaining our spreads,” Sanjay Agarwal, MD & CEO said.

Asset quality was largely stable for the quarter. Gross non-performing assets as a percentage of gross advances were higher at 2.1 percent against 2 percent in September quarter and net NPAs remained unchanged at 1.3 percent.

At 12:15 hours IST, the stock was quoting at Rs 609.85, down Rs 11.30, or 1.82