AU Small Finance Bank Ltd.

General Overview:
AU Small Finance Bank Ltd. is an Indian scheduled bank which was founded in 1996 as a vehicle
finance company AU Financiers (India) Ltd. and later on 19 April 2017 it was converted to small
finance bank. It is in the banking and finance sector (private sector). It is listed on NSE and BSE. It is
headquartered in Jaipur, Rajasthan and is a Fortune India 500 Company. They have 572 touchpoints
and they have expanded their offerings to 27 products and solutions across key verticals such as
financing, deposits, insurance, transaction banking, mutual funds, business banking and digital
banking.

Management of the Company:

The corporate team of the company includes: Board of Directors, Audit committee, Stakeholders
Relationship Committee, Nomination and remuneration committee, Corporate social responsibility
committee, Risk management committee, Management and Chief Financial Officer.

The company is professionally operated. The board comprises of 7 Directors, of whom one is
Independent Director (part-time), three are Independent director, one Additional Director (Non-
Executive), one Managing Director and one whole time Director.

The company has an independent internal management assurance function which is commensurate
with its size and scale. The Audit Committee of the Board of Directors reviews the internal audit
reports and the adequacy and effectiveness of the internal control.

Leadership team consists of two Key-Managerial Personnel and 17 other executives and department
heads.

SWOT Analysis:
Strengths:
 Company with high TTM EPS Growth
 Growth in Net Profit with increasing Profit Margin (QoQ)
 Growth in Quarterly Net Profit with increasing Profit Margin (YoY)
 Increasing Revenue every Quarter for the past 4 Quarters
 Book Value per share Improving for last 2 years
 FII / FPI or Institutions increasing their shareholding
 Companies with rising net profit margins - quarterly as well as TTM basis

Weaknesses:
 Red Flag: High Interest Payments Compared to Earnings
 MFs decreased their shareholding last quarter
 Inefficient use of capital to generate profits - ROCE declining in the last 2 years
 Inefficient use of shareholder funds - ROE declining in the last 2 years
 Inefficient use of assets to generate profits - ROA declining in the last 2 years
 Companies with High Debt
 Promoter decreasing their shareholding
 Declining Net Cash Flow: Companies not able to generate net cash
  Weak performer: Stock lost more than 20% in 1 month
 Weak Momentum: Price below Short, Medium- and Long-Term Averages

Opportunities:
 Brokers upgraded recommendation or target price in the past three months
 Positive breakout (LTP > R1)
 Rising Delivery Percentage Compared to Previous Day and Month, Strong Volumes
 Decrease in NPA in recent results
 Decrease in Provision in recent results

Threats:
 Increasing trend in Non-core income
 RSI indicating price weakness
 Increase in provisions in recent results.

The company’s share price was showing upward trend if we see from April 2019. It started falling
because of the impact of COVID-19 which has affected the share market adversely. The technical
analysis indicates that the monthly moving crossover average of the company is in bullish stage. But
if we see the daily moving average is in very bearish stage.

Growth attributes of the company:

Competitive analysis:

During the fiscal year 2018-19, the company has reported 58% in the Total Income to ₹3411
crore as compared to ₹2155 crore in the year 2017-18 which is remarkable growth if we
compare it to other companies.
The major competitor of the Company are HDFC Bank, Kotak Mahindra Bank, ICICI Bank. These
companies are the pioneer in the Private Banking sector.
Since the company was established in 2017, the company shown a remarkable growth if the
compare the stats to other companies.

Conclusion-
As per my research, I got to a conclusion that the company is performing really well in Non-Banking
Financing company. The company is pioneer in the sector. If we see the moving average, from one
month it is in neutral stage even though the stock market is going down.

Since the company has good plans for expansion and enhancing their product line, there will be
good growth. If you are an investor the you can trade stocks of this company. The career
opportunities in the company is also remarkable.