Arihant Capital recommended hold rating on Bandhan Bank with a target price of Rs 658 in its research report dated May 02, 2019.
Arihant Capital's research report on Bandhan Bank
Bandhan Bank has delivered a stellar set of numbers in 4QFY19, ahead of our expectation. It has reported strong numbers on all fronts – asset quality, AUM growth, profitability and margin. PAT jumped substantially by 68% YoY to Rs 651 cr, supported by strong topline growth. Strong AUM growth of 33% YoY, led to 46% YoY growth in NII resulting into sharp uptick in NIM. Robust growth in other income and higher margin with normal credit costs enabled Bandhan to deliver +5% RoA during the quarter. Asset quality trend continued to improve as GNPAs declined by 37bps QoQ to 2% (Ex-IL&FS – 1%), and PCR was steady at 72%. Liability profile of the bank continue to improve with a deposit growth of 28% YoY. Retail deposits account for 77.4% of the total deposits. Cost-to-income ratio improved significantly largely due to strong income growth whereas OPEX growth was virtually at same rate. CI for the quarter stood at 29.9% vs 33.7% QoQ.
We Maintain our ‘Hold’ rating with revised target price of Rs 658, giving an upside potential of 5%.
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