KR Choksey's research report on Bandhan Bank
Net Interest Income (NII) for Q4FY23 stood at INR 24,718 Mn, a decline of 2.7% YoY but a growth of 18.8% QoQ. The Core NIMs stood at 7.3% in Q4FY23, a contraction of 140 bps YoY, whereas they expanded by 80 bps QoQ. Pre-Provision Operating Profits (PPOP) declined by 28.8% YoY/ 6.6% QoQ to INR 17,957 Mn. Net profit for Q4FY23 stood at INR 8,083 Mn, a fall of 57.5% YoY led by a higher base in Q4FY22 and lower operating profits but grew by 178.2% QoQ driven by lower provisions. The GNPA was 4.87% as of March 31, 2023, compared to a comparable 6.46% as of March 31, 2022. The NNPA for the quarter ended stood at 1.17% vs 1.66% as of March 31, 2022, of the net advances. Advances as of March 31, 2023, were reported at INR 10,47,568Mn, a growth of 11.5% YoY/ 13.8% QoQ. The deposit grew by 12.2% YoY/ 5.7% QoQ to INR 10,80,693 Mn with CASA ratio of 39.3% as against 41.6% in Q4FY22.
Outlook
We maintain our target price at INR 305 per share (unchanged), implying a P/ABV multiple of 2.0x to the adjusted book value of INR 151.9 per share for FY25E, showing an upside of 26.4% over the CMP. Accordingly, we reiterate our BUY rating on the shares of Bandhan Bank Ltd.
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