AU Small Finance Bank Management Guidance Tracker
36 forward-looking guidance items tracked across 9 quarters.
Margins
Management targets profitability and return ratios similar to FY23, despite margin pressure, supported by fee income growth.
Q2 FY24NIM within guided range for FY24ActiveNIM of 5.5% in Q2 remains within the guided range for the full year, despite structural pressure.
Q2 FY24Cost-to-income ratio similar to FY23ActiveFull-year cost-to-income ratio expected to land similar to last financial year, despite investments.
Q2 FY25Full-year credit cost around 1.28% of loan portfolioTrackedManagement expects H2 credit cost to be broadly similar to H1, with a possible variance of 10-15 bps depending on economic conditions.
Q2 FY25Full-year cost-to-income ratio around 60%TrackedDespite seasonally higher OpEx in H2, management expects cost-to-income to be ~60% for FY25, down from 63-64% last year.
Q2 FY25Full-year cost of funds in 7.10%-7.15% rangeTrackedRevised down from initial 7.2-7.25% due to better deposit franchise and stable rates.
Q2 FY25Target ROA of 1.6% for FY25TrackedManagement aims to defend ROA at 1.6% despite elevated credit costs, supported by other income and cost control.
Q3 FY25FY25 cost-to-income ratio of 57%-58%ActiveFull-year cost-to-income ratio expected to be 57%-58%, with Q4 seasonally higher expenses.
Q3 FY25FY25 ROA guidance of 1.6%ActiveDespite elevated credit costs, the bank expects to be within striking range of 1.6% ROA for FY25.
Q3 FY25Cost of funds guided to 7.10%-7.15% for FY25ActiveEven after recent rate hikes on savings and FD, cost of funds expected at lower end of guided range.
Q4 FY25Credit cost of 75-85 bps on total average assets over medium termTrackedManagement expects normalized credit cost to be in the range of 75-85 bps, with FY26 likely at the higher end (around 85 bps) due to residual stress in unsecured books in H1.
Q4 FY25MFI credit cost to improve to ~3.5% in FY26TrackedMFI credit cost is expected to decline from elevated levels to around 3.5% in FY26, with normalization by H2.
Q4 FY25Credit card credit cost to be 6-7% in FY26TrackedCredit card credit cost is expected to be in the range of 6-7% for FY26, down from ~12.5% in FY25, with H1 elevated and H2 normalizing.
Q1 FY26FY27 ROA target of 1.8% reiteratedTrackedManagement reaffirmed achieving 1.8% ROA by FY27, despite near-term margin and credit cost pressures.
Q1 FY26Full-year credit cost guidance raised to ~1% of assetsTrackedCredit cost expected to be around 1% of average total assets, up 10-15 bps from previous guidance of 85-90 bps.
Q1 FY26NIM expected to bottom in Q2, improve from Q3ActiveNet interest margin likely to decline further in Q2 but start recovering from Q3 onwards, assuming no further rate cuts.
Q2 FY26Full-year credit cost guidance of 1% of average assetsTrackedManagement expects full-year credit cost to be within 1% of average total assets, driven by declining unsecured slippages and seasonal recoveries in H2.
Q2 FY26NIM expansion expected over next couple of quartersActiveAssuming no further rate cuts, NIM should continue to expand as deposit book reprices and asset mix stabilizes.
Q2 FY26Cost-to-income ratio below 60% and OpEx/assets below 4.3%TrackedManagement targets cost-to-income ratio below 60% and operating expense to average assets below 4.3% over the medium term.
Q3 FY26Full-year credit cost of ~1% of average assetsActiveManagement reiterated guidance for FY26 credit cost at 100 bps on average assets, supported by improving asset quality and CGFMU coverage.
Q3 FY26Cost-to-income ratio below 60%ActiveManagement expects cost-to-income ratio to remain below 60%, with nine-month ratio at 57%.
Q4 FY26Cost-to-assets ratio below 4% in FY27TrackedManagement expects cost-to-assets (ex-CGFMU) to decline below 4% in FY27 from 4.1% in FY26, driven by operating efficiency and AI-led automation.
Q4 FY26Sustained ROA of 1.8% on a full-year basisTrackedManagement aims to achieve 1.8% ROA on a full-year basis in FY27, supported by operating leverage and lower credit costs.
Growth
Full-year credit cost guidance unchanged from FY23, with asset quality expected to remain range-bound.
Q1 FY24Credit card business to break even by FY25TrackedManagement expects the credit card business to become profitable from FY25, as scale and EMI penetration improve.
Q2 FY24Full-year loan growth of 25-26%ActiveManagement guided for on-balance sheet advances growth of 25-26% for FY24, driven by liability growth.
Q3 FY25FY25 loan growth of ~20%ActiveTotal loan portfolio expected to grow around 20% for FY25, with secured assets growing 23%-24% and continued degrowth in MFI and credit cards.
Q1 FY26MFI book target of INR 7,000 crore by year-endTrackedMicrofinance book expected to bottom in Q1, stabilize in Q2, and grow to INR 7,000 crore by March 2026 (5% YoY growth).
Q2 FY26Loan growth target of 2x-2.5x nominal GDPTrackedThe bank targets full-year loan growth in the range of 2x to 2.5x of nominal GDP, with core secured assets growing 22% YoY.
Q3 FY26ROA target of 1.8% over medium termTrackedManagement aims to achieve 1.8% ROA on a sustainable basis, with FY27 as a potential timeline.
Q3 FY26Loan growth of 20-22%TrackedManagement targets loan growth of 20-22% in FY27, around 2.25-2.5x nominal GDP.
Q4 FY26Credit cost guidance of ~90bps for FY27TrackedManagement advised analysts to model credit costs around 90bps for FY27, though actual performance may be better.
Expansion
The bank plans to expand distribution by adding over 60 new branches and touchpoints during the current financial year.
Q2 FY24MFI book to be ~10% of balance sheet post-mergerTrackedPost-merger, MFI will be 8% of balance sheet, intended to be kept around 10% going forward.
Q4 FY26Universal banking license application filed in March 2026ActiveThe bank filed its final universal banking license application in March 2026 and awaits regulatory approvals.