Arihant Capital has given Hold recommendation for Bandhan Bank with a target price of Rs. 323 in its research report issued on Jan 23, 2022
Arihant Capital’s research report on Bandhan Bank
After reporting whopping loss of INR 3,009 cr in Q2FY22, Bandhan Bank has posted PAT of INR 859 cr in Q3FY22 which was sharply higher then our estimate of INR 478 cr, driven by lower provisioning expenses. Operating performance was healthy as NII for the quarter increased by 3% YoY and operating profit grew by 2% YoY/26% QoQ. Collection efficiency improved across geography and restructuring pool is declining gradually. However, the slippages in the current quarter were higher and NPA ratio stood flat despite ~Rs12bn write-offs and improved recoveries. Headline NPA ratio GNPA/NNPA stood at 10.8%/3% flat QoQ. NIMs improved by 20bps QoQ at 7.8%. Loan portfolio (on book + off book + TLTRO + PTC) for Q3FY22 grew by 7.8% QoQ.
We revise our rating on the stock to Hold from Neutral with a revised TP of INR 323 (earlier INR 296), based on 2.6x FY24E ABV.