ICICI Securities has issued a buy rating on AU Small Finance Bank with a target price of ₹1,250 in its research report dated September 04, 2026. According to the report, the brokerage maintains its bullish stance on the stock, valuing it at 3.3x FY28E BVPS. The stock is currently trading at 3.4x/2.8x FY27E/28E BVPS respectively.
AU Small Finance Bank has received in-principle approval to convert into a universal bank, positioning it as one of the fastest-growing retail-focused private sector banks in India. As reported by ICICI Securities, this conversion will enable the bank to enter the large-cap banking space with a distinct competitive advantage, positioning it to continue gaining credit and deposit market share at a swift pace.
Over the past decade, AU Small Finance Bank has demonstrated superior execution capabilities with strong >30% loan CAGR, average credit cost of ~1% and >15% RoE. According to ICICI Securities research, this performance track record positions the bank favorably for continued growth in the competitive banking landscape.
Notably, AU's incremental credit market share stands at 1% in FY26 versus 0.6% on a period-end basis, suggesting continued outpacing of system credit growth and potential market share gains from existing incumbents. As reported by ICICI Securities, this trend is particularly significant given that the private sector market share is trending lower while PSBs are capturing incremental market share.
