Small finance banks shares: AU and Ujjivan stocks crash 6% - What should investors do? Buy or sell? Target price, upside
Small finance banks shares: AU Small Finance Bank and Ujjivan Small Finance Bank shares plunged over 6% in Monday's trading session amid weak sentiment in the Indian stock market.
AU Small Finance Bank share price opened at ₹884 per share today, as compared to the previous close of ₹932.90 on Friday and touched an intraday low of ₹845.40. Meanwhile, Ujjivan Small Finance Bank share price opened at ₹57.60 on NSE today, as compared to the previous close of ₹58.10 last week. The banking stock touched an intraday low of ₹54.44 today.
Both small finance stocks fell sharply after Sensex and Nifty 50 dropped in early trade on Monday.
AU Small Finance Bank reported a 53% year-on-year increase in net profit to ₹858 crore for the second quarter ended September 30, 2026, supported by higher interest income. The bank had recorded a net profit of ₹561 crore in the corresponding quarter of the previous financial year.
The lender’s total income rose to ₹6,382 crore in the September quarter, compared with ₹5,224 crore in the year-ago period, according to a regulatory filing.
Interest income increased to ₹5,612 crore during the quarter under review from ₹4,511 crore in the same quarter last year.
AU Small Finance Bank’s net interest income (NII) rose 32% year-on-year to ₹2,820 crore in the July-September quarter, compared with ₹2,144 crore in the corresponding quarter of the previous year.
[Ujjivan Small Finance Bank](https://scanx.trade/company/ujjivan-small-finance-bank-ltd) reported its highest-ever quarterly profit after tax (PAT) of ₹365 crore in Q2 FY27, with return on assets (ROA) improving to 2.4% from 2.2% in the preceding quarter.
The bank’s net interest income (NII) rose 35% year-on-year to ₹1,244 crore, supported by a net interest margin (NIM) of 8.4%. Despite an increase in fresh slippages, asset quality remained stable, with gross non-performing assets (GNPA) at 2.1% and net NPA at 0.31%.
Total income stood at ₹2,450 crore, reflecting strong revenue growth driven by expansion in the bank’s asset base. Ujjivan Small Finance Bank retained its FY27 asset quality guidance of 2.0-2.2%, even as fresh slippages rose to ₹350 crore in Q2 FY27 from ₹170 crore in the previous quarter.
The bank’s gross loan book grew 32.1% year-on-year to ₹45,699 crore, while total deposits increased 29.2% to ₹50,643 crore. Current account and savings account (CASA) deposits accounted for 26% of the total deposit base. Meanwhile, secured lending segments contributed 52.1% of the loan book, while the unsecured micro banking portfolio expanded by around 6% in the first half of FY27.
Global brokerage firm Jefferies has given a ‘buy’ rating to AU Small Finance Bank stock, with a target price of ₹1,250, seeing an upside potential up to 34%.
“AU-SFB's profit for Sep-Qtr at Rs8.6bn, up 53% YoY, was in line with estimates, with strong NII growth of 32% YoY led by loan growth (25%). Slippages were tad higher than our est, but credit costs were lower due to a fall in the coverage ratio; the bank has also written off more loans. Transition to Universal Bank will strengthen deposit franchise and grading. We lower est. by 1-5% for FY27-29 & see 28% CAGR in profit over FY27-29, so stays in our 25% CAGR Club,” said the brokerage firm.
On the technical outlook, Mahesh M Ojha, VP Research & Business Development at Kantilal Chhaganlal Securities, Ujjivan Small Finance Bank is witnessing a neutral trend on the weekly chart, indicating a lack of a clear directional bias.
“The stock has immediate support in the ₹53–50 zone, which will be crucial to watch for downside protection. On the upside, resistance is placed at ₹60, followed by ₹63 and ₹66. A sustained move above these resistance levels could improve the bullish momentum, while a breach of the support zone may lead to further weakness,” Ojha said.
Vaamanaa covers business and stock market news. Started in 2020, she has been producing news on digital platforms for over 4.5 years now. She writes on markets, commodities, IPOs, and industry. She has worked for news channels like Jagran New Media and Business Insider India. You can reach out to her at vaamanaa.sethi@htdigital.in.
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