Buy Bandhan Bank; target of Rs 265: KR Choksey

KR Choksey is bullish on Bandhan Bank has recommended buy rating on the stock with a target price of Rs 265 in its research report dated October 26, 2023.

Broker Research

October 27, 2023 / 14:56 IST

Buy

KR Choksey's research report on Bandhan Bank

Net Interest Income (NII) for Q2FY24 stood at INR 24,433 Mn, with marginal de-growth of 1.9% QoQ but grew by 11.4% YoY. Pre-Provision Operating Profits (PPOP) grew by 2.0% YoY/ 1.3% QoQ to INR 15,834 Mn Net Profit for Q2FY24 stood at INR 7,211 Mn, a growth of 244.6% YoY. The GNPA was 7.32% as of September 30, 2023, vs a comparable 7.19% as of September 30, 2022 (vs 6.76% as of June 30, 2023). NNPA for the quarter ended stood at 2.32% vs 1.86% of the net advances as of September 30, 2022. As of September 30, 2023, advances (on book) were reported at INR 10,20,277 Mn, a growth of 13.1% YoY/ 3.9% QoQ. The deposit grew by 12.8% YoY (+3.3% QoQ) at INR 11,20,792 Mn with a CASA ratio at 38.5% as against 40.8% in Q2FY23 (vs 36.0% as of June 30, 2023). The capital adequacy ratio for the period ended stood at 20.6%, within the regulatory requirement. Tier-1 Ratio was at 18.2%.

Outlook

We revise our target price to INR 265 per share (earlier INR 275 per share), by assigning a P/ABV multiple of 1.9x to the adjusted book value of INR 139.4 per share for FY25E, thereby implying an upside of 21.6% over the CMP. Accordingly, we maintain our BUY rating on the shares of Bandhan Bank Ltd.

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