AU Small Finance Bank: Shares of this bank recorded a 10% jump, with 10 times more trading volume today.:

News Topical, Digital Desk : Shares of AU Small Finance Bank Ltd. jumped 10% to a record high on Monday . The surge was driven by strong buying and heavy trading volume . Nearly 7.3 million shares of the company were traded during the day , ten times higher than the 20-day average of 700,000 shares.

This increase follows the bank's strong second-quarter results and improving asset quality . Analysts expect the bank's performance to improve further in the coming quarters . The bank is now focusing its efforts on rapid growth.

Opinion of brokerage firms

Global brokerage Citi has upgraded AU Small Finance Bank to ' Buy ' rating and set the target price at ₹ 990 .
According to Citi , the bank's earnings beat expectations. The bank reported a 1.37% return on assets ( RoA ) , a 5 basis point increase in net interest margins ( NIMs ) , a 24% quarterly increase in fee income, and a reduction in credit costs (1.7% vs. 1.97%).
Microfinance SMA levels have also improved to 2.9% (previously 4.3%), while forward flows related to credit cards, mortgages , and commercial banking have also declined. Bank management stated that the impact of the ECL transition will be neutral to positive, and the bank aims to increase market share through its pan-India distribution network .
Citi expects NIMs to improve further as the bank benefits from yield repricing and declining deposit rates . It has raised its FY26 - FY28 earnings forecast by 4%.
Nomura also upgraded the bank's stock to a ' Neutral ' rating with a target price of ₹ 750. Nomura described the bank's Q2 performance as "strong on all fronts" and raised its FY26 - FY28 EPS estimates by 8-12 % .
According to Nomura , the bank delivered strong NIMs, fee income, and credit costs . The company expects the bank to report an average RoA of 1.6 % , RoE of 16% , and EPS CAGR of 29% over FY26-28 .
Jefferies also maintained its ' Buy ' rating with a target price of ₹ 940. The bank reported a profit of ₹ 560 crore in the second quarter , down 2 % year - on - year , but better than expected , driven by strong margins and reduced credit costs .
The bank 's AUM ( assets under management ) grew 17 % year -over - year and is expected to grow by up to 20 % as unsecured loans improve . Jefferies believes that improved credit quality will allow the bank to grow rapidly , and the transition to a universal banking platform will pose a significant opportunity over the medium term .
Morgan Stanley maintained its ' Overweight ' rating and raised its target price to ₹ 1,175 . According to the brokerage , Q2FY26 results were better than expected on both NIMs and asset quality , further strengthening the outlook for 40 % EPS growth in FY27 and 23 % in FY28 .
Morgan Stanley said that the bank 's significant improvement in microfinance asset quality, 28 % annual growth in secured loans, and reduction in unsecured loans are key positive signs for the bank.