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Last Updated : Jan 14, 2020 08:23 AM IST | Source: Moneycontrol.com

Bandhan Bank Q3 preview: Healthy scorecard expected; lower tax rate to boost PAT

Net interest income (NII) may see a YoY jump of 44 percent, coming at Rs 1,619 crore. Sequentially, NII is likely to see a rise of 5.9 percent, the estimates of Kotak Securities showed.

Bandhan Bank acquired HDFC-backed Gruh Finance for $3.2 billion (roughly Rs 24,000 crore).
Bandhan Bank acquired HDFC-backed Gruh Finance for $3.2 billion (roughly Rs 24,000 crore).

Private sector lender Bandhan Bank is set to come out with its October-December (Q3) quarter numbers on January 14 and brokerages expect the bank to report a healthy scorecard.

Domestic brokerage firm Kotak Securities is expecting a 109.3 percent year-on-year (YoY) jump in the lender's PAT for the third quarter of the financial year 2020. PAT growth is higher on account of a lower tax rate. However, sequentially, the profit numbers may see a drop of 28.6 percent.

"The bank may report a PAT of Rs 693.5 crore for the December quarter of FY20, against Rs 331.3 crore reported in the corresponding quarter a year ago and Rs 971.8 crore reported in the September quarter of FY20," said Kotak Securities in a report.

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The estimates of the brokerage show, the pre-provision profit of Bandhan Bank may come at Rs 1,309.2 crore for Q3FY20, up 45.4 percent YoY and 0.2 percent QoQ.

Net interest income (NII) may see a YoY jump of 44 percent, coming at Rs 1,619 crore. Sequentially, NII is likely to see a rise of 5.9 percent, the estimates of Kotak Securities showed. It should be noted that the YoY numbers are not comparable on account of the bank's merger with Gruh Finance.

"We expect loan growth at nearly 85 percent YoY (including the acquisition of Gruh Finance) resulting in strong revenue growth of about 45 percent YoY. Adjusted NIM may be flat QoQ," Kotak Securities said.

Brokerage firm Narnolia Financial Advisors expects Bandhan Bank's NII to grow by 49.5 percent YoY and 10 percent QoQ on account of healthy AUM growth and the stable yield on advance.

"AUM growth is expected to be 5 percent QoQ. AUM growth during the quarter might have been affected on account of the protest in the northeastern region," Narnolia said.

The estimates of Narnolia Financial Advisors show Bandhan Bank's NII may come to the tune of Rs 1,529 crore for Q3FY20 while net profit can come around Rs 829 crore. Pre-provision profit is likely to come at Rs 1,362 crore for Q3FY20, Narnolia Financial Advisors said.

While a stable trend on asset quality is expected, investors and analysts will keep a close eye on the commentary on growth, indebtedness of borrowers, progress of the merger and the asset quality of the bank.

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First Published on Jan 14, 2020 08:23 am
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