Accumulate Bandhan Bank; target of Rs 164: KR Choksey

KR Choksey recommended Accumulate rating on Bandhan Bank with a target price of Rs 164 in its research report dated February 04, 2024.

Broker Research

February 04, 2025 / 15:11 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

KR Choksey's research report on Bandhan Bank

Net Interest Income (NII) for the quarter stood at INR 28,303 Mn, reflecting a 12.1% YoY growth but a 4.0% QoQ decline. Core NIMs stood at 7.4%, improving by 20 bps YoY but contracting 20 bps QoQ. The NII missed our expectations primarily due to lower yields. PreProvision Operating Profits (PPOP) increased by 21.1% YoY (+9.0% QoQ) to INR 20,214 Mn, exceeding our estimates by 2.4%, driven by higher non-interest income. The net profit for Q3FY25 stood at INR 4,265 Mn, a decline of 41.8% YoY, primarily led by higher provisions. We trim our adjusted book value estimates downwards for FY26E/ FY27E by 4.4%/ 6.7%, respectively, given the continued stress in the microfinance portfolio and the need for higher provisions.

Outlook

We revise our target price to INR 164 per share (earlier INR 200) by assigning a P/ABV multiple of 0.9x (earlier INR 1.2x), rolling over our valuation to the adjusted book value of INR 182.7 per share for FY27E, implying an upside of 11.1% over the CMP. We maintain our “ACCUMULATE” rating as we expect gradual recovery and value creation over the medium to long term.

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