Brokerages maintained their bullish outlook on Bandhan Bank following the lender’s robust business update for the quarter ended March 31, which exceeded expectations.
Bandhan Bank reported a 15.1% quarterly growth in deposits and a notable 25.1% surge on a year-on-year basis. Furthermore, the growth in Current Account Savings Account (CASA) deposits stood at 18% both quarterly and annually.
Nomura highlighted Bandhan Bank’s strong growth momentum, particularly driven by improved microfinance (MFI) collections. The brokerage also emphasized the robust growth in deposit base, supported by healthy expansion in retail and bulk deposits.
Nomura emphasized that the key factor for Bandhan’s re-rating lies in its consistent performance in asset quality. The brokerage set a target price of Rs 275 per share, suggesting a potential upside of 38.9% from the current market price.
Jefferies noted that the bank’s deposit growth accelerated, driven by an increase in wholesale deposits. Additionally, the lender’s collection efficiency improved to 99%, while slippages moderated. Jefferies issued a target price of Rs 290 per share, implying a potential upside of 46.5%.
Jefferies also highlighted that the Reserve Bank of India’s approval for Chandra Shekhar Ghosh to continue as the MD and CEO will serve as a significant trigger for the stock. Ghosh’s term is scheduled to end on July 9, 2024.
JP Morgan mentioned that uncertainty surrounding the Credit Guarantee Fund for Micro Units (CGFMU) audit could keep the stock range-bound in the near term.
Bandhan Bank shares surged 4.2% in trade on April 4, closing at Rs 197.95 per share. Since the beginning of 2024, the lender’s shares have experienced a decline of approximately 3.6%.
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