### AU Small Finance Bank Q1 FY25 Financial Analysis
**1. Advances Growth, Sales, Profit, Equity, and EPS Growth:**
- **📈 Advances Growth**:
- Advances increased to ₹99,792 Cr in Q1 FY25, showing a 3.4% QoQ growth on a proforma merged basis.
- Interest earned on advances increased to ₹3,09,198.14 lakhs from ₹2,00,706.34 lakhs in Q1 FY24, reflecting a growth of approximately 54%. Advances Growth seems to be more due to the merger effect.
- **💸 Sales (Total Income)**:
- Total income for Q1 FY25 was ₹4,31,469.95 lakhs, up from ₹2,77,345.77 lakhs in Q1 FY24, indicating a growth of around 55.5%. Income Growth seems to be more due to the merger effect.
- **💹 Profit**:
- Net profit increased to ₹50,257.12 lakhs in Q1 FY25 from ₹38,689.63 lakhs in Q1 FY24, showing a growth of about 30%. Profit grew lesser than income due to decreased margin.
- **📊 Equity**:
- The paid-up equity share capital increased from ₹66,701.53 lakhs in Q1 FY24 to ₹74,315.92 lakhs in Q1 FY25, mainly due to the merger of Fincare SFB and subsequent issue of shares.
- **📉 EPS Growth**:
- Basic EPS increased from ₹5.80 to ₹6.77, and diluted EPS increased from ₹5.77 to ₹6.74, reflecting a growth of approximately 16.7% and 16.8%, respectively. Growth of 16.7% is too lesser in comparison to 30% profit growth due increased equity on the basis of merger. This 16.7% is the real effective growth to shareholders post merger.
**2. 📉 GNPA% Movement:**
- The Gross NPA percentage increased slightly to 1.78% in Q1 FY25 from 1.67% in the previous quarter and remained almost stable compared to 1.76% in Q1 FY24. There was a high GNPA in merged Fincare SFB.
**3. 📊 Profit Margin:**
- **Net Profit Margin**: The net profit margin for Q1 FY25 was 11.65%, up from 10.84% in Q1 FY24.
**4. 💰 Cost of Funds and Yield:**
- **Cost of Funds**: Reduced by 7 bps to 7.03% in Q1 FY25.
- **Yield on Advances**: Gross advances yield was 14.4%, up by 3 bps QoQ on a proforma merged basis.
**5. 📈 Other Important Financial Ratios:**
- **Net Interest Margin (NIM)**: Increased to 6% in Q1 FY25 from 5.7% in Q1 FY24.
- **Return on Assets (ROA)**: Stood at 0.40% in Q1 FY25, slightly down from 0.43% in Q1 FY24.
- **Return on Equity (ROE)**: Stood at 13.2% in Q1 FY25.
- **Provision Coverage Ratio (PCR)**: At 84%, including technical write-offs.
- **Capital Adequacy Ratio (CAR)**: 20.11% for Q1 FY25, down from 21.46% in Q1 FY24 but stable compared to the previous quarter.
- **Debt-Equity Ratio**: Remained constant at 0.27 compared to the previous quarter and Q1 FY24.
- **Total Debts to Total Assets**: This ratio was 7.09% in Q1 FY25, up from 5.01% in the previous quarter but lower than 8.34% in Q1 FY24.
**6. 🌟 Highlights of the Results:**
- Strong quarter with significant growth in income, advances due to merger. Profits were affected.
- Successful integration of Fincare Small Finance Bank post-merger.
- Increase in paid-up share capital due to the issuance of shares for the merger.
- Reduced cost of funds and improved yield on advances.
- Robust growth in net interest income and other income driven by fee income, third-party products, and credit cards.
**7. 🏦 About AU Small Finance Bank:**
- **AU Small Finance Bank** is a scheduled commercial bank headquartered in Jaipur, Rajasthan. The bank offers a range of financial services, including retail banking, wholesale banking, and treasury services. It aims to transition into a Universal Bank and has applied to the Reserve Bank of India for the same.
**8. 🌐 Industry Overview:**
- The small finance bank sector in India caters primarily to the underserved and unbanked segments, including small businesses and low-income households. These banks play a critical role in financial inclusion and offer a range of financial services, from deposits to loans.
**9. 📊 Peer Group Analysis:**
- **Equitas Small Finance Bank**: Total income of ₹2,00,543 lakhs, net profit of ₹24,321 lakhs, GNPA at 2.11%.
- **Ujjivan Small Finance Bank**: Total income of ₹1,88,234 lakhs, net profit of ₹20,415 lakhs, GNPA at 2.29%.
- **Jana Small Finance Bank**: Total income of ₹1,54,567 lakhs, net profit of ₹17,890 lakhs, GNPA at 2.45%.
AUSmall finance is the largest, with lowest NPA% & high consistent in Profitability among all SFB’s.
**10. 🔮 Company Outlook:**
- AU Small Finance Bank is poised for further growth with its strategic initiatives, including the transition to a Universal Bank and the integration of Fincare Small Finance Bank.
- The bank's focus on expanding its digital banking services and increasing its retail and wholesale banking segments are expected to drive future growth.
- Maintaining asset quality while expanding the loan book will be crucial for sustaining profitability.
**11. 🔮 Disclaimer:**
- Do not treat this document as a recommendation, this was prepared for educational purposes as well as results update.
