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TInformist, Monday, Oct. 20, 2025

 

By Anjana Therese Antony

 

MUMBAI – The strong September quarter earnings growth and analysts' optimistic views attracted bulls to the options chain of AU Small Finance Bank Monday, and traders aggressively bought out-of-the-money calls and sold puts. The stock hit its record high Monday and is likely to see 4-5% more upside in the near term, derivatives analysts at two domestic broking firms said. However, a rise beyond this level is unlikely as its valuation is expensive and could see a correction even before it rises to the expected level, one of the analysts said. 

 

Shares of the lender closed 9% higher at INR 865.20 on the National Stock Exchange after hitting an all-time high of INR 871.65 during the day. The bank's market capitalisation rose by more than INR 54 billion to almost INR 646 billion Monday. The volume of the stock traded was 316% higher at 20 million compared to Friday. The near-term support for the stock is seen at INR 840-INR 830 and resistance at INR 880-INR 900, as per estimates from two derivatives analysts. The stock is unlikely to sustain above INR 900, one of the analysts said. 

 

Premiums on the INR 870-INR 900 call contracts, which are 1-4% higher than the spot level, increased manifold, indicating the expectation of further rise in the stock price in the near term. On the puts side, premiums on INR 860-INR 780 contracts declined 83-94%. The highest open interest addition was at INR 900 call and INR 840 put options. Traders added long positions to the futures contracts amid the optimism. The October series closed 9% higher at INR 866.75 and open interest rose 10% to 22.63 million. 

 

For the quarter ended September, the Jaipur-based bank reported a 2% on-year fall in its net profit to INR 5.61 billion, but it was slightly higher than the Street's expectation of INR 5.20 billion. JM Financial raised its earnings estimate for the bank for 2025-26 (Apr-Mar) by 4% and for FY28 by 16%. "We are factoring gradual normalisation in credit cost supported by improvement in assets quality," the broking firm said in its report. It has a target price of INR 870 for the stock, which is a mere 1% higher than the spot level. 

 

The lender's management expects the bank's microfinance loan segment to start growing from the December quarter and expects the credit card segment to start growing in a "couple of quarters". The bank's overall loan portfolio as of Sept. 30 was at INR 1.23 trillion, up 17% on year and 4.5% on quarter.  

 

--Nifty 50 October closed at 25930.20, up 172.40 points; 87.05-point premium to the spot index

--Nifty 50 November closed at 26060.70, up 168.30 points; 217.55-point premium to the spot index

--Nifty 50 December closed at 26223.20, up 172.20 points; 380.05-point premium to the spot index

 

ICICI Bank, Reliance Industries, HDFC Bank, Federal Bank, State Bank of India, AU Small Finance Bank, Axis Bank, Dixon Technologies India, IndusInd Bank, Infosys, IDFC FIRST Bank, Kotak Mahindra Bank, Bharti Airtel, Punjab National Bank, Tata Consultancy Services, Hindalco Industries, Vodafone Idea, and Jio Financial Services were the most actively traded underlying stocks Monday.  End

 

Edited by Tanima Banerjee

 

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