Buy Bandhan Bank; target of Rs 327: Anand Rathi

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Anand Rathi's research report on Bandhan Bank

Diversification across products and regions are strategic priorities of Bandhan Bank. This would transform its business model to be more scalable and sustainable. For this, the bank reinforced its top management, hiring professionals from various private banks. A combination of deepening product penetration and branch penetration across states would drive a 21% loan CAGR over FY23-25. With asset quality issues likely to be peaked out in H2FY23 earnings are expected to normalize thereafter. We believe, on a sustainable basis, Bandhan would deliver 2.5%+ RoA and 25% RoE.

Outlook

We initiate coverage on Bandhan Bank with a BUY rating and a target of Rs327, valuing the bank at 1.9x FY25e ABV.

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Bandhan Bank - 19 -01-2023 - anand