RESEARCH REPORT ON AU SMALL FINANCE BANK

BY KUNIKA JAISWAL
 GENERAL OVERVIEW
• AU Small Finance Bank Limited is an Indian scheduled commercial bank that was
founded as vehicle finance company AU Financiers (India) Ltd in 1996 and
converted to a small finance bank on 19 April 2017.
• AU Small Finance Bank serves low and middle income individuals and micro and
small businesses that have limited or no access to formal banking and finance
channels. The Bank offers loans, deposits and payment products and services.
• AU Small Finance Bank ranked 355 in the list of Fortune India 500 (2019)
companies, with annual revenue of ₹3,410.87 crore (US$478 million) and Total B/S
Assets of ₹31,198.68 crore (US$4.4 billion). AU Bank enjoys long term credit rating
of “AA-/Stable” from CRISIL Ratings, ICRA Ratings, India Ratings & CARE Ratings.
SHAREHOLDING PATTERN OF AU SMALL FINANCE
BANK
 MANAGEMENT OF THE COMPANY
Board of Directors
Name
Mr.Krishan Kant Rathi
Prof. Mankal Shankar Sriram
Mrs. Jyoti Narang
Mr. Pushpinder Singh
Mr. V G Kannan
Mr. Sanjay Agarwal
Mr. Raj Vikash Verma
Mr. Uttam Tiberwal
Key Executives
Designation Name Designation
Independent Director Mr. Ashok Khandelwal Chief Compliance officer
Independent Director Mr. Vimal Jain Chief Financial officer
Mr. Ankur Tripathi Chief Information officer
Independent Director
Mr. Deepak Jain Chief operating officer
Independent Director Mr. Alok Mohinder Gupta Chief Risk Officer
Independent Director Mr. Sharad Goklani Chief technology officer
Managing Director & Mr. Farhan Ahmed Chief Vigilance Officer
CEO
Mr. Manmohan Parnami Co. Secretary & Compl. Officer
Part time Chairman &
Independent Director Mr. Rishi Dhariwal Group Head
Whole time Director Mr. Sumit Dhir Head- Internal Audit
 STRENGTH
• Strong Annual EPS Growth
• Increasing Revenue every Quarter for the past 8 Quarters
• Effectively using its capital to generate profit - RoCE improving in last 2 years
• Effectively using Shareholders fund - Return on equity (ROE) improving since last 2 year
• Growth in Net Profit with increasing Profit Margin (QoQ)

WEAKNESS
• Broker downgrades in price or recommendation in the past one month
• Promoter decreasing their shareholding
• Declining Net Cash Flow : Companies not able to generate net cash

OPPORTUNITY
• Brokers upgraded recommendation or target price in the past three months
• Companies with 10% increase in share price over three months, with rising net profit growth
• 30 Day SMA crossing over 200 Day SMA, and current price greater than open

THREAT
• Stocks with Expensive Valuations according to the Trendlyne Valuation Score
 COMPETITIVE ANALYSIS
Name CMP (₹) P/E Mar Cap.(Crs) Div. Yld. NP Qtr Sales Qtr Book Value (₹)
(%) (₹.Crs) (₹.Crs)

HDFC Bank Ltd 1,569 26.96 867,933 0.41 7,730 30,483 384
HDFCBANK NSE

ICICI Bank Ltd 720 27.42 499,247 0.28 4,616 20,383 215
ICICIBANK NSE

State Bank of India 432 16.98 385,722 0.93 6,504 65,564 266
SBIN NSE

Kotak Mahindra Bank Ltd 1,818 48.96 360,484 0.05 1,642 6,480 319
KOTAKBANK NSE

Axis Bank Ltd 790 31.73 242,238 0 2,160 16,003 339

AXISBANK NSE
 CONCLUSION

• AU Small Finance Bank Ltd is engaged in the activities of providing financial

services such as personal banking, insurance, retail loans and wholesale
banking. The company operates in the business segment namely, Treasury;
Retail banking; Wholesale banking; and Other banking operations. It
generates maximum revenue from Retail banking segment. The retail banking
segment serves retail customers through a branch network and other delivery
channels. Revenues of the retail banking segment are derived from interest
earned on retail loans, fees from services rendered, and others.
Geographically, it operates only in India.