AU Small Finance Bank’s profit rose 52.9% in the quarter ended Sept. 30, 2026, alongside lower bad-loan ratios, while its net interest margin slipped from the previous quarter and reports said brokerages trimmed share-price targets.
The bank’s board approved unaudited quarterly and half-year results on Oct. 24. Its filing showed net profit of ₹857.69 crore, compared with ₹560.87 crore a year earlier. The bank’s investor presentation put gross nonperforming assets (NPAs) at 1.99% of advances, down from 2.41% a year earlier, and net NPAs at 0.81%, versus 0.88%. EconoTimes previously covered the bank’s profit and asset-quality results.
Net interest income climbed 32% year over year to ₹2,820 crore from ₹2,144 crore. Net interest margin (NIM), which measures net interest income relative to average interest-earning assets, reached 5.8%, up from 5.5% a year earlier, but eased from 5.9% in the June quarter. The bank attributed the sequential decline to a larger share of investments in assets and seasonality. Operating expenses rose 26% to ₹2,077 crore as business volumes grew and the bank invested in distribution, manpower, branding and technology, according to its investor presentation.
LiveMint, citing Jefferies research, reported that Jefferies kept its Buy rating and lowered its target price to ₹1,250 from ₹1,270. The outlet said Jefferies pointed to higher operating costs and tighter bancassurance fee norms. NDTV Profit reported that JPMorgan maintained an Overweight rating and reduced its target to ₹1,165 from ₹1,230. The outlet described JPMorgan’s view as assigning some asset-quality stress to seasonal factors, with monsoon conditions a separate risk.
Business Standard’s share-price data showed AU Small Finance Bank closed at ₹932.90 on the National Stock Exchange of India (NSE) on Oct. 23, the last session before the results. Relative to that close, the two targets were 34.0% and 24.9% higher, respectively. These comparisons use a past share price and are not forecasts.
The bank is also pursuing a transition from small finance bank to universal bank status. It said it received in-principle approval from the Reserve Bank of India in August 2025 and applied for a final license in March 2026. The application remains subject to the regulator’s assessment.
