AU Bank shares surge 16% after RBI clears re-appointment of its MD & CEO. Should you buy?

The script was trading 16.82 per cent higher at ₹677.75 per share on Thursday. The stock has risen 21.58 per cent in the last one week and 13.56 per cent in one month. On a year-to-date basis, shares of AU bank has gained 3.08 per cent.

The re-appointment of Agarwal is valid with effect from 19 April till 18 April, 2026, AU Small Finance Bank said in a statement on Wednesday.

Besides, the central bank has also cleared re-appointment of Uttam Tibrewal as the whole-time director for a period of three years.

The shareholders had already approved the said reappointment on 9 March last year, the lender said in a filing.

What should investors do?

Domestic brokerage Motilal Oswal said that AU Bank’s stock price has been under pressure due to the lack of clarity about management continuity, as well as the uncertain macro environment.

Reiterating a ‘Buy’ call on the stock with a target price of ₹740, the brokerage said the RBI approval removes a key overhang and will now shift the focus to the fundamental performance of the bank.

Meanwhile, ICICI Securities expects this extension to ensure top management continuity. Besides, it improves visibility on continuation of its growth journey like in the past – scale with robust asset quality and profitability, it said.

The brokerage has upgraded the stock to ‘Buy’ from ‘Add’ with a revised target price of ₹770 from ₹700 earlier, as it believes that the recent correction in the stock price was unwarranted and that it is well poised to deliver over 20 per cent advance growth and continue improving the RoE trajectory.

ICICI Securities values the stock at 3.5 times FY25E versus 3.5 times on FY24E BVPS earlier.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.