AU Small Finance Bank Limited (AUBANK)
Mid CapFinancial Services stocks · Mid cap · NSE
AU Small Finance Bank Limited is an Indian small finance bank transitioning to a universal bank. It focuses on retail and commercial banking, leveraging a tech-led, customer-centric model. The bank recently completed the core banking system migration of Fincare SFB, integrating operations and expanding its footprint.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Weak fundamentals, management trust is acceptable, price trend is neutral, and recent execution is consistent.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
low confidence · 0/0 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 30 Jun 2026
Excellent · 75/100Rev +21% YoY · PAT +37% YoY · +6% QoQ · operating leverage
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹5,303 Cr | +21.1% | +5.7% |
| EBITDA | NDF | NDF | NDF |
| Operating margin | NDF | NDF | NDF |
| PAT | ₹796 Cr | +37.0% | -4.3% |
| PAT margin | 15.0% | +174 bps | -157 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Where growth can come from, and what can break the case
Q4'FY26 PAT surged 65% YoY, 25% QoQ to ₹832 cr, driven by NIM expansion to 5.96% and lower credit costs. Loan growth at 21% YoY, deposits at 23% YoY, outpacing private banking sector estimates. Asset quality improved with GNPA at 2.03%.
The bank delivered strong Q4 performance with robust PAT growth, NIM expansion, and improved asset quality. Loan and deposit growth exceeded sector estimates, indicating market share gains. The universal bank transition and ongoing AI/tech initiatives are strategic positives, but the sustainability of QoQ margin expansion and credit cost reduction, partly attributed to seasonal factors, warrants close monitoring.
Gross Loan Portfolio by Product (as of Mar'26)
Latest issuer-disclosed distribution across 8 reported categories.
Retail Secured Assets
Retail Secured Assets grew by 21% YoY, driven by Wheels (+27%) and Gold loans (+108%). The bank has deep distribution and underwriting expertise in granular loans.
Commercial Banking
Commercial Banking grew by 30% YoY, creating differentiation via TAT and servicing. It generates 56% of its funding requirement and contributes ~11% to deposits.
AI & Tech Integration
Rolled out an Agentic AI platform for Gold loan origination, with Mortgages and other loan verticals to follow. AI-led voice for inbound calling is live, with outbound campaigns underway.
Universal Bank Transition
RBI replaced the NOFHC condition, applying it only if the bank or promoter group establishes a future group entity. This enhances access to deposits, talent, and brand perception.
Touchpoint Expansion
In FY26, the bank added 334 net touchpoints, including 78 new liability branches, mostly in urban markets.
Distribution Network Doubling
Distribution of Wheels, Mortgages, and Gold loans nearly doubled over the last 2 years, reaching 900-1,000 touchpoints each.
Planned FY27 Additions
Plan for FY27 includes adding 80-100 new liability branches, 120-130 new asset centers, and 40-50 new business banking touchpoints.
Universal Bank Conversion Benefits
Management expects enhanced access to prime customer segments, higher refinance limits, greater government banking access, and stronger talent attraction/retention.
AI-driven Efficiency
Management states AI will enable efficient operations, productivity uplift, and better scale management, while continuously bringing agility and innovation.
Competitive Deposit Environment
The bank increased peak SA rate by 25bps to 6.75% and Peak TD rate by 15bps to 7.25% w.e.f. April 23, 2026, indicating pressure on cost of funds.
Treasury Losses
Q4'FY26 saw ₹17 cr of treasury losses, contributing to a 4% YoY decline in total other income, despite core other income growth.
Unsecured Loan Asset Quality
Unsecured businesses (MFI, credit card, PL) de-grew by 1% YoY, and Digital Unsecured and Inclusive Banking segments have higher GNPA ratios of 4.2% and 3.8% respectively.
NIM Sustainability
Q4'FY26 NIM expansion was partly driven by 'seasonal benefits coming from lower slippages, higher recovery from stressed assets and lower day count in February'.
Geographic Concentration
Rajasthan accounts for 25% of GLP and 42% of deposits, while Maharashtra accounts for 22% of GLP and 28% of deposits, indicating regional concentration.
Management accountability
What management said, and what results must prove
Management accountability
What management said, and what results must prove
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
YoY comparison provides a clear view of underlying growth and structural changes in a financial services business. QoQ is crucial for assessing sequential momentum, utilization, spreads, and the immediate impact of operational efficiencies or seasonal factors like Q4 recoveries.
AUM Growth (Gross Loan Portfolio)
Gross loan portfolio grew by 21% YoY (8% QoQ) to ₹1.40 lac cr, exceeding ~13% estimated growth in the private banking sector.
NIM
NIM expanded by 24bps QoQ to 5.96% in Q4'FY26 from 5.7% in Q3'FY26. FY26 NIM stood at 5.65% compared to 5.94% in FY25.
Borrowing Cost (Cost of Funds)
Cost of Funds declined further by 12bps QoQ to 6.49% in Q4'FY26. For FY26, CoF was 6.75%, a YoY decline of 32 bps.
GNPA/NNPA
GNPA declined by 27bps QoQ to 2.03%, and NNPA stood at 0.74% in Q4'FY26, compared to 2.30% and 0.88% respectively at Dec'25.
Focus on AI-led Process Re-engineering
Management is focused on Agentic AI-led process re-engineering and automation, organizational re-alignment, and broadening the span of control to drive efficiency.
Continued Distribution Expansion
The bank plans to add 80-100 liability branches annually and expand distribution within existing touchpoints for other products in FY27.
Deposit Strategy Pillars
Deposit strategy is focused on granularity (~60% from branch banking), stability (79% CASA + Retail TD + Non-callable Bulk TD), and cost of funds.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| NIM | 5.96% (Q4'FY26) | Sustainability of NIM expansion in subsequent quarters, given the seasonal benefits cited for Q4 and recent deposit rate hikes. |
| Unsecured Loan Growth & Asset Quality | 7% QoQ growth, 1% YoY decline (Q4'FY26) | Sustained YoY growth in unsecured segments and stable or improving GNPA ratios, as this segment carries higher risk. |
| Cost of Funds | 6.49% (Q4'FY26) | Further declines or stabilization of CoF, especially after recent deposit rate increases, to maintain margin health. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Trend score and candlestick chart
62BullishSMA20 +4.9% / mo · MACD − · near 52W high
Technical chart
AUBANKdaily · 1Y · AUTO+9.4%Daily technical trend read
Mixed signalsSignals are conflicting — long-term uptrend intact. RSI 46. Wait for confirmation.
- Price above SMA200 (long-term uptrend) but mid-term MAs not aligned.
- SMA20 rising (~4.7% over last month) — short-term momentum positive.
- RSI(14) at 46 — falling, no extreme reading.
- MACD below signal, histogram expanding negatively — bearish momentum building.
- 7% off 52W high · 53% above 52W low.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Relative Strength & Trend Stage
- Price is 6.1% above the 30-week proxy.
- The 50-DMA is above the 30-week proxy and its slope is rising +1.4%.
- Both 3-month and 6-month returns are positive.
Valuation & score drivers
U-Score 25 · OVERVALUED · pillar breakdown, sector model, fair-value anchor
Valuation & score drivers
U-Score 25 · OVERVALUED · pillar breakdown, sector model, fair-value anchor
Fundamental score breakdown
OVERVALUEDWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- Quality contributes 12/20 to the score.
- Growth contributes 11/25 to the score.
- Cash flow contributes 1/10 to the score.
Main drags
- Fair-value margin of safety is negative at -138.7%.
- Valuation is weaker at 0/30; verify the latest quarterly trend.
- Balance sheet is weaker at 0/15; verify the latest quarterly trend.
Bank valuation: P/B adjusted for ROE and asset quality
Banks are balance-sheet businesses, so book value quality matters more than simple earnings multiples.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: +3 points.
Factor attribution
Modelled fair value
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Mixed Trust: Claim history is still being built. It ranks around the 35th percentile of the scored universe and 51st percentile within Financial Services. Main check: cash conversion is weak at 43/100.
Healthy Trust Lite: Promoter pledge is zero. Key concern: Debt/equity is 3.56.
Usable, but needs evidence. Treat guidance with a margin of safety.
overall median 67 · Financial Services: 51st pctile, median 62 · Mid: 18th pctile, median 76
140 documents have extracted text, but claim history is not strong enough yet.
0 claims extracted · No contradicted claim yet
How to read this Trust Score
Mixed Trust · low confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter pledge is zero.
- ▸4/4 latest quarters had positive YoY revenue growth.
- ▸3/4 latest quarters had positive YoY PAT growth.
- ▸Latest 3 quarters had positive YoY PAT growth.
Trust risks
- ▸Debt/equity is 3.56.
- ▸Promoter holding is only 22.7%.
- ▸Only 0 years of positive FCF.
Trust Lite uses financial behaviour only. Prefer claim-tested Trust when enough concall claims have later outcomes.
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Fundamentals
Valuation
- P/E
- 235.00
- P/B
- —
- EV/EBITDA
- 14501.33
- Market Cap
- 79937.00Cr
Profitability
- ROE
- 22.30%
- ROCE
- 12.40%
- ROA
- 7.77%
- Dividend Y
- 0.09%
Growth (CAGR)
- Revenue 5Y
- 13.00%
- EPS 5Y
- 13.00%
- Revenue 3Y
- 29.00%
- EPS 3Y
- 49.00%
Balance Sheet
- Debt/Equity
- 3.56
- Interest Coverage
- —
- Altman Z
- 6.32
- Book Value
- —
Cash Flow
- FCF Yield
- —
- FCF Positive Y
- 0/5
- OCF
- 884.00 Cr
- EPS TTM
- 13.40
Shareholding
- Promoter Hold
- 22.74%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 82%
Financial History
Updated 5/9/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
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Peers
Business-comparable names in Financial Services, ranked by similarity
Peers
Business-comparable peers in Financial Services — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.