Bandhan Bank shares plunged more than 4 percent in the early trading hours of July 21, after the lender reported a 65 percent drop in net profit for the first quarter of the financial year 2026. The shares of the bank were trading at Rs 179 apiece in the morning, snapping a four-day gaining streak.
Bandhan Bank had released its results in the post market hours of July 18 (Friday). The company's net profit stood at Rs 372 crore in Q1 FY26, marking a 65 percent on-year drop from the Rs 1,063 crore reported in the corresponding quarter of the previous financial year.
The bank's total income for the quarter stood at Rs 6,201.49 crore, up marginally from Rs 6,081.73 crore in Q1 FY25. Its net interest income fell nearly 8 percent on-year to Rs 2,757 crore during the quarter under review.
The bank's asset quality worsened, with net non performing assets (NPA) rising nearly 25 percent on year to Rs 1,744 crore. Net NPA ratio meanwhile rose to 1.36 percent.
The lender's operating profit fell more than 14 percent on-year to Rs 1,668 crore, while net interest margin stood at 6.4 percent during the first quarter of the financial year 2026. "The provisions (other than tax) & contingencies charged to the Profit and Loss for Q1 FY26 were at Rs. 1,147 crore compared to Rs. 523 crore in Q1 FY25," the bank said.
In its investor communication, the bank emphasised that elevated slippages, especially in the eastern region, and lingering stress in the micro-finance portfolio were key contributors to the asset quality pressures.
This, in turn, necessitated higher provisioning during the quarter, impacting net earnings. Management acknowledged that the bank remains in a phase of consolidation and is taking calibrated steps to strengthen underwriting standards and improve collections.
Brokerages remain bullish on the stock:
Despite the drop in the bank's Q1 numbers, brokerages remain bullish on the stock.
Jefferies on Bandhan Bank:
Jefferies kept a 'Buy' call on the stock, with a target price of Rs 215 per share. This implies an upside potential of nearly 15 percent from the previous closing price of Rs 187 apiece.
The international brokerage said that the lender's Q1 profit was slightly above its estimates, with better NII and lower credit costs. It noted that slippages and credit costs improved sequentially, but stayed due to stress.
Jefferies however cut the bank's FY26 earnings estimates by 6 percent, and those for FY27/28 by 3 percent, to factor in the recent rate cut. It noted that the valuations of the bank remain reasonable, and a turnaround in the MFI cycle should be a trigger.
Macquarie on Bandhan Bank:
Macquarie kept an 'Outperform' call on the stock, with a target price of Rs 210 per share. This implies an upside potential of more than 12 percent from the stock’s previous closing price.
The brokerage said that Q1 profit missed its estimates, driven by higher credit costs, which was partly offset by higher other income. It noted that the company's net interest margin (NIM) will remain under pressure in the near term.
CLSA on Bandhan Bank:
CLSA kept a 'High Conviction Outperform' rating on the stock, with a target price of Rs 220 per share. This implies an upside potential of nearly 18 percent from the previous closing price. NII & core PPOP were lower than estimates due to weaker loan growth and fee income, it said.
CLSA added that slippages were slightly better, while CASA ratio moderated by 400 bps. It noted that the impact of June repo rate cut will show in the earnings for the ongoing Q1. Credit costs will likely materially improve In H2FY26, and rate of MFI book reduction will slow down, it added.
The brokerage however cut estimates by 13-36 percent on lower PPoP growth.
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Speaking about the Bandhan Bank's performance during the quarter, its CEO Partha Pratim Sengupta said, “Bandhan Bank has delivered a sequentially improving performance in Q1 FY26, marked by strong growth in deposits and continued momentum in Retail & Wholesale banking. While the operating environment poses certain challenges, our performance reflects the underlying resilience of our business and the strength of our strategic direction. We remain focused on prudent risk management, operational efficiency, and delivering long-term value for our customers and stakeholders."
Bandhan Bank share price history:
Despite today’s fall in share price, Bandhan Bank shares have gained over 2.5 percent in the past five days, and more than 22 percent in the past six months. While the stock is up nearly 15 percent in 2025 so far, it fell more than 7 percent in the past one year.
The company currently has a market capitalization of over Rs 29,380 crore, and a P/E ratio of 14.67, as per data on NSE.
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