Arihant Capital's research report on Bandhan Bank
Bandhan Bank has reported strong performance during Q4FY22 with 18.5x YoY increase in net profit at INR 1,902 cr was significantly higher than our estimate of INR 1,168 cr, driven by healthy growth and negligible provisions. Operating profit for the quarter grew strongly by 46% YoY/29% QoQ to INR 2,521 cr, driven by higher NII and other income growth. NII for the quarter increased by 45% YoY/20% QoQ to INR 2,540 cr, led by strong advances growth of 14% YoY/13% QoQ and 90bps sequential increase in margins at 8.7%. Deposits growth was robust at 14% QoQ led by non-retail term deposits. Asset quality of the bank saw sharp improvement as GNPA declined sharply from 10.8% to 6.5% QoQ and NNPA declined from 3% to 1.7% on QoQ basis. Collection efficiency (including NPA accounts) improved from 91% in Q3FY22 to 94% in Q4FY22.
Outlook
We revise our rating on the stock to Accumulate from Hold with a revised TP of INR 363 (earlier INR 323), based on 2.5x FY24E ABV.
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