More Stories

Informist, Saturday, Apr. 25, 2026

By Diksha Tripathy

MUMBAI -  AU Small Finance Bank is expected to report a sharp rise in net profit for the March quarter due to a significant decline in its loan provisions and a modest growth in operating profit, according to brokerages tracking the lender.

The bank is expected to report net profit of INR 7.48 billion for the March quarter, up over 48% on year, according to the average of estimates from 10 brokerages. Sequentially, the net profit is likely to increase nearly 9% from INR 6.88 billion.

The highest estimate for net profit was INR 7.94 billion from Motilal Oswal Financial Services Ltd. The lowest estimate was INR 7.09 billion from Elara Securities (India) Pvt. Ltd.

The bank is expected to report net interest income of INR 25.11 billion during the quarter, up nearly 20% on year and over 7% on quarter, according to the average of the estimates. The highest estimate for net interest income was INR 25.51 billion from Motilal Oswal Financial Services Ltd., while the lowest estimate was INR 24.68 billion from Emkay Global Financial Services Ltd.

"With the transition to a universal bank unlocks larger growth opportunities while providing greater portfolio flexibility and the potential for stronger returns," brokerage firm Motilal Oswal said in a report. "Universal bank transition timeline and commentary on capital raise in FY27 will be key near-term catalysts," Nomura Equity Research said in its report.

Most brokerages attributed the expectation for the rise in profit to an improvement in slippages on quarter. The asset quality is expected to remain stable with continued improvement in bank's unsecured retail portfolio, Kotak Securities Ltd. said in a report.

The net interest margin of the bank, a key indicator of the profitability, is likely to improve in the March quarter led by term deposit repricing, recent cuts in savings account rate, and a moderation in cost of funds, according to brokerages.

The advances growth is expected to remain healthy backed by wheels, commercial banking, and a recovery in unsecured segment, Motilal Oswal said in a report. AU Small Finance Bank Ltd.'s gross advances were up 25% on year at INR 1.36 trillion as of Mar. 31, according to provisional figures released by the bank Apr. 4. The lender's gross advances rose nearly 9% sequentially.

The Motilal Oswal report also said the bank's deposits are expected to grow 18% on year and 6% on quarter.  Total deposits rose nearly 23% on year and 10% on quarter to INR 1.53 trillion as of Mar. 31.

Brokerage firm Motilal Oswal, in its report, highlighted that the recent de-empanelment of AU Small Finance Bank will have a limited impact on its finances. The Haryana government in February de-empanelled the bank from government business after there were reports of fraud at its branches dealing with the state government accounts.

The bank has not yet disclosed the date for announcement of its financial results for the March quarter and FY26.

On Friday, shares of AU Small Finance closed at INR 1,065.65 on the National Stock Exchange, up nearly 1% from the previous session. For the December quarter, the bank had reported net profit of INR 6.68 billion and total income of INR 54.51 billion.

Of the total 11 estimates by brokerages on the bank available with Informist, four have a ‘buy' recommendation with an average share price of INR 1,120 per share. Four have a ‘hold' rating with an average share price of INR 937 per share. The remaining three have a ‘sell' or equivalent recommendation for the company with an average price of INR 883 per share.

Following are the Jan-Mar earnings estimates for AU Small Finance Bank from 10 brokerage firms in the descending order by the estimate of net profit in INR billion:

End

Edited by Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.