AU Small Finance Bank Ltd Share Price Prediction & Financial Analysis: 2025, 2030, 2035, 2050

Financial Performance Overview

AU Small Finance Bank has demonstrated consistent growth in key financial metrics, as evidenced by its performance from 2021 to 2025:

• Revenue Growth: Revenue increased from ₹4,950 crore in 2021 to ₹16,063 crore in 2025, reflecting a CAGR of 34.24%. This growth is driven by strong loan disbursements and expansion in deposit mobilization.
• Net Profit Growth: Net profit rose from ₹1,171 crore in 2021 to ₹2,106 crore in 2025, with a CAGR of 15.78%. The bank’s focus on operational efficiency and diversified revenue streams supports this trend.
• Earnings Per Share (EPS): EPS grew from ₹38.19 in 2021 to ₹28.32 in 2025, with some fluctuations due to share dilution and market conditions.
• Book Value Per Share (BVPS): BVPS increased from ₹200.99 in 2021 to ₹230.57 in 2025, indicating steady asset growth.
• Net Interest Margin (NIM): NIM improved from 4.58% in 2021 to 5.07% in 2025, reflecting better profitability from lending activities.
• Market Performance: The stock’s market cap grew by 13.1% in the past year, trading at ₹687 as of May 9, 2025, with a price-to-book ratio of 3.00.

Despite challenges like rising non-performing assets (NPAs) and a low interest coverage ratio, AU Small Finance Bank’s 27% deposit growth and 20% loan growth in Q4 FY25 highlight its resilience.

Share Price Forecast Methodology

To forecast AU Small Finance Bank’s share price, we use the historical CAGR of stock returns, revenue, and net profit, combined with industry trends and analyst projections. The bank’s stock has delivered a CAGR of approximately 20.84% over the past few years. For long-term forecasts, we assume a conservative CAGR range of 12–15% for stock price growth, factoring in macroeconomic uncertainties and the bank’s strategic initiatives, such as its pursuit of a universal banking license.

Current Share Price (May 2025): ₹687

2025 Share Price Forecast

• Assumed CAGR: 15% (aligned with short-term analyst optimism and Q4 FY25 performance).
• Projected Share Price: ₹687 × (1 + 0.15) = ₹790.
• Rationale: Analysts project a target of ₹672–₹880 for 2025, driven by strong Q4 FY25 results (18% profit growth, 57% YoY net interest income growth). The bank’s focus on improving CASA ratio and reducing credit costs supports this outlook.

2030 Share Price Forecast

• Assumed CAGR: 13% (moderated due to potential market saturation and competition).
• Projected Share Price: ₹687 × (1 + 0.13)^5 ≈ ₹1,265.
• Rationale: By 2030, AU Small Finance Bank is expected to strengthen its market position through digital banking expansion and financial inclusion initiatives. Analyst targets suggest a price of ₹1,250–₹1,669, supported by revenue growth and potential universal bank status.

2035 Share Price Forecast

• Assumed CAGR: 12% (conservative, factoring in long-term economic cycles).
• Projected Share Price: ₹1,265 × (1 + 0.12)^5 ≈ ₹2,230.
• Rationale: The bank’s focus on technology, such as AI-driven lending and fintech collaborations, could drive sustained growth. Its commitment to rural markets and improving asset quality will likely bolster investor confidence.

2050 Share Price Forecast

• Assumed CAGR: 10% (long-term conservative estimate due to global uncertainties).
• Projected Share Price: ₹2,230 × (1 + 0.10)^15 ≈ ₹9,320.
• Rationale: By 2050, AU Small Finance Bank could be a dominant player in India’s financial sector, leveraging advanced technologies and a strong retail banking network. This aligns with long-term banking sector trends, as seen in projections for peers like SBI.

Financial Report Snapshot (FY25)

• Total Income: ₹18,590 crore (up 48.63% YoY).
• Net Profit: ₹2,106 crore (up 37% YoY).
• Deposits: ₹1,24,269 crore (42.53% YoY growth).
• CASA Ratio: 29%, with CASA deposits at ₹36,253 crore.
• Asset Quality: Gross NPAs at 2.28%, Net NPAs at 0.74% (up from 1.67% and 0.55% in FY24).
• Dividend: ₹1 per share, yielding 0.15%.
• Key Ratios:
  • Return on Equity (ROE): 12.26%.
  • Net Interest Margin (NIM): 5.8% in Q4 FY25.
  • Price-to-Earnings (P/E): ~24 (based on EPS of ₹28.32 and share price of ₹687).

Strengths:

• Strong revenue and deposit growth.
• Expanding digital banking and rural outreach.
• Improved NIM and operational efficiency.

Challenges:

• Rising NPAs in microfinance and credit card segments.
• Low interest coverage ratio.
• Macroeconomic risks like inflation and global tariff wars.

Investment Considerations

AU Small Finance Bank’s growth trajectory is promising, driven by its focus on financial inclusion, technological innovation, and a robust retail banking model. However, investors should be cautious of:

• Asset Quality Risks: Elevated NPAs require proactive management.
• Market Volatility: External factors like geopolitical tensions could impact banking stocks.
• Competition: Larger banks and fintechs may challenge market share.

Analyst ratings remain largely positive, with 54.17% recommending a “Buy” and an average target of ₹672.75 for the near term. Long-term investors may find AU Small Finance Bank appealing due to its consistent revenue growth and strategic vision.

Conclusion

AU Small Finance Bank Ltd is well-positioned for growth, with projected share prices of ₹790 (2025), ₹1,265 (2030), ₹2,230 (2035), and ₹9,320 (2050), assuming CAGRs of 10–15%. Its strong financial performance, with a revenue CAGR of 34.24% and net profit CAGR of 15.78%, underscores its potential. However, investors should monitor asset quality and macroeconomic trends. Conduct thorough due diligence and consult a financial advisor before investing.

Disclaimer: The above forecasts are based on historical data and assumptions. Stock prices are subject to market risks, and past performance is not indicative of future results.