Accumulate Bandhan Bank; target of Rs 200: KR Choksey

KR Choksey recommended accumulate rating on Bandhan Bank with a target price of Rs 200 in its research report dated October 29, 2024.

Broker Research

October 29, 2024 / 13:55 IST

Accumulate

26 Aug, 2025 12:21

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Todays L/H

KR Choksey's research report on Bandhan Bank

Net Interest Income (NII) for Q2FY25 stood at INR 29,483 Mn, a growth of 20.7% YoY (-1.9% QoQ). The yields on advances improved by 40 bps YoY (-20 bps QoQ) at 13.7%. The Core NIMs stood at 7.4% in Q2FY25, improving by 20 bps YoY. The NII was 2.0% lower than our estimates. Pre-Provision Operating Profits (PPOP) grew by 17.2% YoY (-4.4% QoQ) to INR 18,551 Mn. PPOP was in line with our estimates. The net profit for Q2FY25 stood at INR 9,374 Mn, a growth of 30.0% YoY, primarily led by lower provisions. We adjusted our EPS estimates downwards for FY26E by 2.9%, assuming slightly higher credit costs. We revise our target price to INR 200 per share (earlier INR 217) by assigning a P/ABV multiple of 1.2x (earlier INR 1.3x) to the adjusted book value of INR 166.8 per share for FY26E, implying an upside of 8.2% over the CMP. We have lowered our multiple in light of the challenges facing the MFI industry, which are likely to affect business growth due to the risks associated with the EEB portfolio concerning both growth and asset quality. We maintain our rating at “ACCUMULATE”.

Outlook

We revise our target price to INR 200 per share (earlier INR 217) by assigning a P/ABV multiple of 1.2x to the adjusted book value of INR 166.8 per share for FY26E, thereby implying an upside of 8.2% over the CMP. Accordingly, we maintain our rating of “ACCUMULATE” on the shares of Bandhan Bank Ltd.

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