AUBANK
Mid CapAU Small Finance Bank Limited
Financial Services
AU Small Finance Bank is an Indian SFB transitioning to a Universal Bank, focused on retail and commercial lending. It reported strong Q4'FY26 results with robust loan and deposit growth, NIM expansion, and improved asset quality. The bank is leveraging AI, expanding its digital footprint, and integrating Fincare SFB's CBS.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Weak fundamentals, management trust is acceptable, price trend is neutral, and recent execution is consistent.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
low confidence · 0/0 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 31 Mar 2026
Excellent · 85/100Rev +18% YoY · PAT +65% YoY · +6% QoQ · operating leverage
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹5,019 Cr | +17.5% | +6.2% |
| EBITDA | NDF | NDF | NDF |
| Operating margin | NDF | NDF | NDF |
| PAT | ₹832 Cr | +65.1% | +24.6% |
| PAT margin | 16.6% | +478 bps | +245 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Where growth can come from, and what can break the case
AUBANK delivers strong Q4'FY26 with PAT up 65% YoY, GLP growing 21% YoY, and deposits up 23% YoY. NIM expanded 24bps QoQ to 5.96%, while GNPA declined 27bps QoQ to 2.03%. Credit cost normalized, and operating efficiency improved, capping a robust financial year.
The bank's Q4'FY26 performance reinforces its growth trajectory, driven by strong retail and commercial asset expansion and deposit accretion. Improved asset quality and NIM expansion are positive. Strategic initiatives like universal bank transition, AI integration, and Fincare CBS migration are progressing, positioning it for future scale and efficiency.
Gross Loan Portfolio by Product
Latest issuer-disclosed distribution across 8 reported categories.
Universal Bank Transition
Bank filed an application with RBI for grant of final license for universal bank transition in March, expecting benefits like enhanced deposit access and talent attraction.
Retail Secured Assets Expansion
Secured businesses grew 23% YoY and 7% QoQ. Distribution for Wheels, Mortgages, Gold loans nearly doubled to 900-1,000 touchpoints each in last 2 years.
AI & Tech-Led Operations
Rolled out first agentic AI platform for Gold loan LOS, with Mortgages and other loan verticals to follow. Focus on reimagining business processes with AI.
Commercial Banking Growth
Commercial Banking GLP grew 29.3% YoY and 11.6% QoQ, with a focus on expanding in newer geographies like AP, TN, and Karnataka.
New Touchpoints
Added 334 net touchpoints in FY26, including 78 new liability branches, mostly in urban markets.
Planned FY27 Touchpoints
Plan to add 80-100 new Deposits touchpoints, 120-130 Retail Assets, 40-50 Business Banking, and 370-400 Inclusive Banking touchpoints in FY27.
Fincare CBS Integration
Migration of core banking system of Fincare SFB into AU has been completed, leading to a single, unified CBS.
Universal Bank Benefits
RBI replaced NOFHC condition, potentially leading to greater access to deposits, enhanced brand perception, and lower PSL targets upon final license grant.
Digital Transformation & AI
Agentic AI platform, revamped AU0101 app, and AI-led use cases across customer onboarding, experience, collections, and internal efficiency are expected to drive productivity.
Brand Campaign
New brand campaign 'Soch Badlo, aur Bank bhi' and celebrity endorsements led to a 5-point uplift in total brand awareness.
Rising Deposit Costs
Bank increased peak SA rate by 25bps to 6.75% and Peak TD rate by 15bps to 7.25% w.e.f. April 23, 2026, which could impact future cost of funds.
Unsecured Business De-growth
Unsecured businesses (MFI, credit card, PL) de-grew by 1% YoY, despite a 7% QoQ growth, indicating ongoing challenges.
Unsecured Loan Asset Quality
Digital Unsecured loans have a GNPA of 4.2% and Inclusive Banking (MFI) has 3.8%, higher than secured segments, despite QoQ improvement.
Treasury Volatility
Total other income de-grew 4% YoY in Q4'FY26 primarily due to ₹17 cr of treasury losses in the quarter.
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
YoY comparison is crucial for assessing overall annual growth and profitability trends in a financial services business. QoQ comparison is vital for tracking sequential momentum in disbursements, asset quality, spreads, and operational efficiency.
Gross Loan Portfolio (GLP) Growth
GLP grew by 21% YoY and 8% QoQ to ₹1.40 lac cr in Q4'FY26.
Net Interest Margin (NIM)
NIM expanded by 24bps QoQ to 5.96% in Q4'FY26 from 5.7% in Q3'FY26. FY26 NIM was 5.65% vs 5.94% in FY25.
Cost of Funds (CoF)
CoF declined by 12bps QoQ to 6.49% in Q4'FY26. FY26 CoF was 6.75%, a YoY decline of 32 bps.
Gross Non-Performing Assets (GNPA)
GNPA declined by 27bps QoQ to 2.03% in Q4'FY26 from 2.30% in Q3'FY26.
Deposit Strategy
Management focuses on granularity, stability, and cost of funds, with ~60% of deposits from branch banking and 79% stable deposits.
AI Integration
Focus is on reimagining business processes and natively embedding AI within these processes, rather than deploying stand-alone tools and bots.
Operating Efficiency
Continued focus on Agentic AI-led process re-engineering, automation, organizational re-alignment, and broadening span of control to drive efficiency.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| NIM Trend | 5.96% in Q4'FY26 | Sustained NIM expansion or stability, especially given recent deposit rate hikes and competitive environment. |
| Asset Quality (GNPA/NNPA) | GNPA 2.03%, NNPA 0.74% in Q4'FY26 | Continued decline in GNPA/NNPA ratios and stable credit costs, particularly in unsecured segments. |
| Universal Bank License Finalization | Application filed in March 2026 | RBI's final approval and the subsequent realization of stated benefits like enhanced deposit access and market acceptance. |
| Unsecured Business Growth | 7% QoQ growth, 1% YoY de-growth in Q4'FY26 | Consistent YoY growth in unsecured businesses, indicating successful turnaround and risk management. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Trend score and candlestick chart
59NeutralSMA20 +2.7% / mo
Technical chart
AUBANKweekly · 6M+1.1%Technical trend read
NeutralTrend is undirectional — long-term trend unclear. RSI 51.
- RSI(14) at 51 — sideways, no extreme reading.
- MACD below signal but histogram contracting — bearish momentum easing.
- 9% off 52W high · 18% above 52W low.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Valuation, score drivers, trust methodology, financials, and peers
Use these sections after reviewing the decision summary, latest result, thesis, management accountability, and technical timing above.
Fundamental score breakdown
OVERVALUEDWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- Quality contributes 11/20 to the score.
- Growth contributes 11/25 to the score.
- Cash flow contributes 1/10 to the score.
Main drags
- Fair-value margin of safety is negative at -121.6%.
- Valuation is weaker at 0/30; verify the latest quarterly trend.
- Balance sheet is weaker at 0/15; verify the latest quarterly trend.
Bank valuation: P/B adjusted for ROE and asset quality
Banks are balance-sheet businesses, so book value quality matters more than simple earnings multiples.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: +0 points.
Factor attribution
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Mixed Trust: Claim history is still being built. It ranks around the 30th percentile of the scored universe and 47th percentile within Financial Services. Main check: cash conversion is weak at 43/100.
Healthy Trust Lite: Promoter pledge is zero. Key concern: Debt/equity is 3.56.
Usable, but needs evidence. Treat guidance with a margin of safety.
overall median 67 · Financial Services: 47th pctile, median 62 · Mid: 19th pctile, median 76
154 documents indexed, but claim history is not strong enough yet.
0 claims extracted · No contradicted claim yet
How to read this Trust Score
Mixed Trust · low confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter pledge is zero.
- ▸4/4 latest quarters had positive YoY revenue growth.
- ▸3/4 latest quarters had positive YoY PAT growth.
Trust risks
- ▸Debt/equity is 3.56.
- ▸Promoter holding is only 22.8%.
- ▸Only 0 years of positive FCF.
Trust Lite uses financial behaviour only. Prefer claim-tested Trust when enough concall claims have later outcomes.
Intrinsic value
Fundamentals
Valuation
- P/E
- 211.00
- P/B
- —
- EV/EBITDA
- 13149.00
- Market Cap
- 71823.00Cr
Profitability
- ROE
- 22.30%
- ROCE
- 12.40%
- ROA
- 7.77%
- Dividend Y
- 0.10%
Growth (CAGR)
- Revenue 5Y
- 14.00%
- EPS 5Y
- 14.00%
- Revenue 3Y
- 29.00%
- EPS 3Y
- 49.00%
Balance Sheet
- Debt/Equity
- 3.56
- Interest Coverage
- —
- Altman Z
- 5.83
- Book Value
- —
Cash Flow
- FCF Yield
- —
- FCF Positive Y
- 0/5
- OCF
- 884.00 Cr
- EPS TTM
- 13.40
Shareholding
- Promoter Hold
- 22.76%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 70%
Financial History
Updated 9/6/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
Business-comparable peers in Financial Services — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.