AU Small Finance Bank Reports Strong Financial Performance in Q2 2024.

AU Small Finance Bank, a largecap private bank, has recently announced its financial results for the quarter ended September 2024. The bank has shown positive performance in this quarter, with a score of 15 compared to 8 in the previous quarter. This improvement can be attributed to various factors.

One of the key highlights of the financial results is the bank’s net interest income, which has been consistently growing in the last five quarters and has reached its highest at Rs 1,974.36 crore. This indicates that the bank’s core business is performing well and generating higher income. The interest earned by the bank has also shown a positive trend, with a growth rate of 54.51% year on year. This is a promising sign for the bank’s near term sales trend.

The bank’s profitability has also increased, with a growth rate of 42.2% year on year in its profit after tax (PAT). The operating profit (PBDIT) has also reached its highest at Rs 493.81 crore in the last five quarters, indicating a positive trend in the bank’s operations. The operating profit margin has also improved, reaching its highest at 12.63%. This shows that the bank’s efficiency has increased.

On the other hand, there are some areas that need improvement for AU Small Finance Bank. The operating cash flow has been consistently falling in the last three years, with the lowest at Rs 2,608.07 crore. This indicates that the bank’s cash revenues from business operations are declining. The gross NPA (non-performing assets) has also reached its highest at 1.98%, indicating an increase in the proportion of stressed loans given by the bank.

Furthermore, the non-operating income of the bank is 84.08% of its profit before tax (PBT), which is a cause for concern. This means that the bank’s income from non-business activities is high, which may not be a sustainable business model. The net NPA has also reached its highest at 0.75%, indicating an increase in the proportion of stressed loans.

Overall, AU Small Finance Bank has shown positive financial performance in the quarter ended September 2024. However, there are some areas that need improvement for the bank to maintain its growth and profitability in the long run. Investors are advised to hold their stocks in the bank, as recommended by MarketsMOJO.