Buy Bandhan Bank; target of Rs 175: ICICI Securities

ICICI Securities is bullish on Bandhan Bank has recommended buy rating on the stock with a target price of Rs 175 in its research report dated January 23, 2026.

Broker Research

January 23, 2026 / 14:37 IST

Buy

ICICI Securities's research report on Bandhan Bank

Bandhan Bank (Bandhan) reported muted Q3FY26 PAT of INR 2.1bn (RoA of 0.4%), pulled down by elevated provisioning, though there was a sharp improvement in reported gross NPA. MFI disbursement increased QoQ as well as YoY, but portfolio de-grew 3% QoQ due to massive ARC sale. Despite stable spreads, NIM improved ~10bps to 5.9% QoQ, aided by better LDR and CRR benefits. GNPA improved sharply by ~32% QoQ with the ratio improving ~170bps QoQ. Net NPA ratio improved 38bps QoQ to 99bps. PCR, however, dipped ~300bps QoQ to ~71%. CET 1 stood strong at 17%. The bank has made a substantial progress in mix change with the secured book’s share now at ~57% (vs. 49% YoY). NIM seems to have bottomed out and has tailwinds from favourable seasonality. Upgrade to BUY (from Hold) with an unchanged TP of INR 175.

Outlook

We see the bank delivering sizeable delta on RoA from 0.6% in FY26E to ~1.2% for FY27E, driven by easing credit costs. Our TP remains unchanged at INR 175 as we value the stock at ~0.9x FY28E ABV (vs. ~1x FY27E ABV). Basis current upside, we upgrade the stock to BUY (from Hold). Key risk: Higher-than-expected stress impacting RoA.

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