Reduce Bandhan Bank; target of Rs 175: Emkay Global Financial

Emkay Global Financial recommended reduce rating on Bandhan Bank with a target price of Rs 175 in its research report dated October 27, 2024.

Broker Research

October 29, 2024 / 11:04 IST

Reduce

live

bselive
nselive

Volume

Todays L/H

Emkay Global Financial's research report on Bandhan Bank

Bandhan Bank reported a 6% PAT beat at Rs9.4bn and RoA of 2.1%, mainly led by higher other income and lower than expected provisions – better than some peers that posted sharp earning downgrades. The bank has logged a healthy AUM growth of 22% YoY/4% QoQ, supported by growth in its secured loan portfolio (~47% of loans). Deposits too grew swiftly, by 27% YoY/7% QoQ, leading to contraction in LDR by 282bps to 88%, which in turn led to a fall of 20bps in NIMs to 7.4%. Overall gross slippages remained elevated at Rs11bn/4.4% of loans, while absence of write-offs led to a 45bps QoQ uptick in GNPA to 4.7%. Management expects slippages to stay elevated in Q3, before cooling down in Q4. The bank shall soon apply for the ECLGS claim of Rs3.5bn, apart from balance CGFMU dues of Rs3.1bn.

Outlook

Further, ex-SBI DMD Partha Sengupta was appointed as the new MD & CEO wef 1-Nov-24 for three years, in line with the trend of PSB bankers joining troubled private banks. We retain REDUCE on Bandhan and TP of Rs175 (1x Sep-26E ABV) amid rising MFI stress.

For all recommendations report, click here