Equity Insights Elite on X

Tags

Top Highlights

• AU Small Finance Bank hasn't given much returns over the last 3-4 years, especially for those who invested since February 2020

• It began trading at more than 8 times P/B ratio and, at one point, reached went over P/B 10 times

• For a Small Finance Bank, these exorbitant P/B ratios don't seem justified, considering that it's generating an approximate 15% return on equity (ROE).

• valuation has since become more rational, currently trading at a P/B ratio of 4

• asset quality remains strong at a 0.55% NPA ratio

• Equitas appears to be in a better position than AU

• Equitas trades at a P/B ratio of 1.8, which is less than half of AU's ratio, despite having superior growth rates and a higher return on assets (ROA) of 2.1%, compared to AU's 1.7%

• Guidance for Equitas 25 % Growth, with ROA sustaining over 2 %