AU Small Finance Bank Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript AU Small Finance Bank Ltd filed with BSE on 29 Apr 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
AU Small Finance Bank reported Q4 FY26 profit after tax of ₹832 crores, up 25% quarter-on-quarter and 65% year-on-year, with ROA improving to 1.8% for the quarter, while full-year PAT grew 25% to ₹2,641 crores with ROA of 1.6%. Deposits grew 10% quarter-on-quarter and 23% year-on-year, loan portfolio grew 8% quarter-on-quarter and 21% year-on-year, and net interest margin expanded 24 basis points quarter-on-quarter to 5.96%. Management also discussed the pending universal banking license application, leadership transitions including a three-year tenure extension for the MD and CEO, and ongoing technology and Agentic AI initiatives across the bank's operations.
Numbers mentioned
Profit after tax: ₹832 crores (Q4 FY26)
p. 5
“Profit for the quarter grew by 25% quarter-on-quarter and 65% year-on-year to ₹832 crores with ROA improving to 1.8% for the quarter.”
Gaurav Jain, page 5 of the filed PDF · View the filing
Profit after tax: ₹2,641 crores (FY26)
p. 5
“Profit after tax for the full year grew by 25% to ₹2,641 crores with ROA improving to 1.6% and ROE at 14.2%.”
Gaurav Jain, page 5 of the filed PDF · View the filing
Net interest margin: 5.96% (Q4 FY26)
p. 4
“Margins expanded by 24 basis points quarter-on-quarter to 5.96%, led by a decline of 12 basis points in cost of funds, 6 basis points benefit from lower gross slippages and higher NPA resolutions, and around 7 basis points seasonal benefit from lower day count in February.”
Gaurav Jain, page 4 of the filed PDF · View the filing
Deposits: ₹1.52 crores (as of Q4 FY26)
p. 7
“Our deposit base now stands at ₹1.52 crores, growing by 10% quarter-on-quarter and 23% Y-o-Y.”
Gaurav Jain, page 7 of the filed PDF · View the filing
Slippages: ₹659 crores (Q4 FY26)
p. 4
“Slippages declined by 17% quarter-onquarter to ₹659 crores, leading to GNPA ratio declining by 27 basis points to 2.03%.”
Gaurav Jain, page 4 of the filed PDF · View the filing
GNPA ratio: 2.03% (Q4 FY26)
p. 4
“Slippages declined by 17% quarter-onquarter to ₹659 crores, leading to GNPA ratio declining by 27 basis points to 2.03%.”
Gaurav Jain, page 4 of the filed PDF · View the filing
Credit cost: 0.6% (Q4 FY26)
p. 4
“Credit cost for Q4 declined to 0.6%, whereas credit cost for full year came at 96 basis points of average assets.”
Gaurav Jain, page 4 of the filed PDF · View the filing
Cost to assets ratio: 4.1% (FY26)
p. 4
“Excluding CGFMU premium, cost to assets ratio for full year declined by 19 basis points to 4.1% from 4.3% in FY25.”
Gaurav Jain, page 4 of the filed PDF · View the filing
Cost of funds: 6.75% (FY26)
p. 8
“Full year cost of funds declined by 32 basis points yearon-year to 6.75% versus 7.07% in FY25.”
Gaurav Jain, page 8 of the filed PDF · View the filing
Wheels book: approximately ₹46,400 crores (FY26)
p. 8
“Within retail, our wheels book grew by 27% year-on-year to reach approximately ₹46,400 crores, driven by improving affordability across segments.”
Gaurav Jain, page 8 of the filed PDF · View the filing
Gold loan business: approximately Rs. 4,000 crores (FY26)
p. 8
“Gold loan business has doubled this year from a low base to reach approximately Rs. 4,000 crores.”
Gaurav Jain, page 8 of the filed PDF · View the filing
Dividend: ₹1 per share (FY26)
p. 9
“The Board of Directors has recommended a dividend of ₹1 per share for FY26, subject to requisite approvals.”
Gaurav Jain, page 9 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
ROA — 1.8% · FY27
stated as an aspiration by Gaurav Jain
p. 12
“Our goal would be to maintain this ROA or achieve this ROA on a full-year basis for next year.”
Gaurav Jain, page 12 of the filed PDF · View the filing
Credit cost — around 90 bps · FY27
stated conditionally by Sanjay Agarwal
p. 16
“we should build it around 90 bps or maybe in that range so that it allows franchise to have some kind of risk-taking capability.”
Sanjay Agarwal, page 16 of the filed PDF · View the filing
Cost to assets ratio — lower than 4% · current financial year
stated as an aspiration by Sanjay Agarwal
p. 15
“I believe next year, this current financial year, we should be lower than 4%.”
Sanjay Agarwal, page 15 of the filed PDF · View the filing
Cost to assets ratio — around 3.5% · three to five years
stated as an aspiration by Sanjay Agarwal
p. 15
“Rather I would say that the first benchmark should be that can I do around 3.5? And that too in three to four, three to five years, right?”
Sanjay Agarwal, page 15 of the filed PDF · View the filing
Loan growth — 2 to 2.5x of India's nominal GDP growth rate · medium term
stated as an aspiration by Gaurav Jain
p. 10
“We believe our franchise is capable of sustainably compounding at 2 to 2.5 x of India’s nominal GDP growth rate, delivering consistent, predictable and long-term value to our shareholders.”
Gaurav Jain, page 10 of the filed PDF · View the filing
Cost of funds — around the repo rate · long-term, once universal bank
stated as an aspiration by Sanjay Agarwal
p. 24
“then my cost of funds should be around the repo rate prevailing at that time. That’s a long-term dream and target, but difficult to comment on the timing.”
Sanjay Agarwal, page 24 of the filed PDF · View the filing
AI-led outbound calling — 25% of total calls · next 2 quarters
stated firmly by Gaurav Jain
p. 7
“Outbound AI-led campaigns are underway across businesses with a target to scale up to 25% of total calls over the next 2 quarters.”
Gaurav Jain, page 7 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said these were standard business banking working capital accounts, not specific high-value cases, provided for based on internal risk assessment
Answered by Vivek Tripathi
Asked by Renish: Details on the Rs 21 crore contingency provision created in Q4
p. 10
“these are normal business banking, working capital cases. We made a risk assessment of what amount is covered through our security and other things and there was a recommendation (from risk), hence we provided it.”
Vivek Tripathi, page 10 of the filed PDF · View the filing
Management said liability pricing decisions are reviewed monthly via ALCO and depend on multiple factors, not a single trend
Answered by Sanjay Agarwal
Asked by Renish: Rationale for hiking savings and TD rates ahead of industry
p. 12
“I think I would say that our 9-year journey has taught us that liabilities is a day-to-day business and we need to play every day.”
Sanjay Agarwal, page 12 of the filed PDF · View the filing
CFO said Q4 ROA reflects seasonal strength and the goal is to achieve similar ROA on a full-year basis next year via opex efficiency and lower credit costs
Answered by Gaurav Jain
Asked by Kunal Shah: Whether the 1.8% ROA can be sustained or improved further
p. 12
“So the ROA at 1.8% reflects that strong seasonality. Our goal would be to maintain this ROA or achieve this ROA on a full-year basis for next year.”
Gaurav Jain, page 12 of the filed PDF · View the filing
CFO indicated cost of funds may have bottomed after the recent rate increase and seasonal margin benefits will not repeat next quarter
Answered by Gaurav Jain
Asked by Kunal Shah: Outlook on margins given cost of funds trends
p. 13
“with this rate increase that we’ve taken, we think cost of funds may have bottomed.”
Gaurav Jain, page 13 of the filed PDF · View the filing
CEO said it is too early to quantify cost impact from AI but expects productivity gains and lower cost to assets over time
Answered by Sanjay Agarwal
Asked by Nitin Aggarwal: How technology investments will translate into cost ratios as the bank transitions to universal banking
p. 15
“I’m not able to imagine what kind of cost reduction AI will do because it’s in a very early stage.”
Sanjay Agarwal, page 15 of the filed PDF · View the filing
CEO said Q4 is seasonally strong and this quarter's numbers should not be used to build full-year estimates
Answered by Sanjay Agarwal
Asked by Nitin Aggarwal: Whether Q4 credit cost and asset quality trends are sustainable
p. 16
“I wouldn’t advise anybody that you should build our this quarter’s credit cost as an overall cost for next year.”
Sanjay Agarwal, page 16 of the filed PDF · View the filing
Management said it is too early to comment on ECL impact and that SFBs may not currently be covered under the ECL program
Answered by Vivek Tripathi
Asked by Jayant Kharote: Impact of new RBI ECL norms on steady-state credit cost
p. 17
“it’s too early to comment on it. Let us understand that, right?”
Vivek Tripathi, page 17 of the filed PDF · View the filing
CEO said liabilities strategy spans multiple segments and geographies and the bank intends to grow deposits pan-India while cross-selling more to existing customers
Answered by Sanjay Agarwal
Asked by Jayant Kharote: Strategy for geographical liability expansion versus asset-side focus in the south
p. 18
“we became a bank to build a liabilitiesfranchise, right? We know that our strength lies in our assets, but our core expertise or core leadership or core acceptance of us as an individual [Bank] is around our leadership, our liabilities franchise.”
Sanjay Agarwal, page 18 of the filed PDF · View the filing
Management said PCR is an outcome of provisioning policy rather than a target, and the Risk Committee assesses provisioning needs quarterly
Answered by Vivek Tripathi
Asked by Pritesh Bumb: Approach to strengthening asset quality metrics like PCR and provisions going forward
p. 19
“PCR is not a defined number. It goes by the provisioning policy and there is no change in the provisioning policy, right?”
Vivek Tripathi, page 19 of the filed PDF · View the filing
CFO said cost of funds has likely bottomed and asset yield will depend on mix shift, with unsecured portfolio growing slower than the rest of the book
Answered by Gaurav Jain
Asked by Param Subramanian: Outlook on margins given cost of funds and asset yield dynamics next year
p. 21
“your asset yield will reflect whatever the asset mix is, right? That is a bit difficult to call out.”
Gaurav Jain, page 21 of the filed PDF · View the filing
CEO said the long-term internal target is for cost of funds to approach the prevailing repo rate once the bank matures as a universal bank
Answered by Sanjay Agarwal
Asked by Ashlesh Sonje: Long-term target for cost of funds relative to peers after universal banking transition
p. 24
“the long-term target, I would say the way we are pushing internally that the cost of money should be around the repo rate prevalent at that time.”
Sanjay Agarwal, page 24 of the filed PDF · View the filing
Risks flagged
Geopolitical tensions and elevated risk sentiment affecting currency, yields and business sentiment
p. 4
“Geopolitical tensions in West Asia continue to weigh on global energy prices, currency markets, and supply chain, elevating overall risk sentiment.”
Gaurav Jain, page 4 of the filed PDF · View the filing
Second-order effects of fuel price pass-through into inflation, consumption and credit
p. 4
“we remain watchful of the second-order effects, particularly fuel prices pass-through into inflation, consumption, and credit.”
Gaurav Jain, page 4 of the filed PDF · View the filing
Volatility in currency, yields and business sentiment in India towards the end of March
p. 4
“Indian macroeconomic environment, whilst relatively on a better footing, did see volatility across currency, yields, and business sentiment towards the latter half of March.”
Gaurav Jain, page 4 of the filed PDF · View the filing
Potential impact on asset yield from mix shift as unsecured portfolio grows slower than the rest of the book
p. 21
“Where your unsecured portfolio, even with the recovery, will probably grow at a pace slower than the rest of the book.”
Gaurav Jain, page 21 of the filed PDF · View the filing
External macro challenges affecting certain markets, products or customer bases leading to reduced onboarding
p. 25
“whenever we find that this market, or product, or a customer base might get affected because of this challenge [or the macro challenges], we don’t onboard them.”
Sanjay Agarwal, page 25 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.