NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Nirmal Bang Report
Bandhan Bank Ltd.’s Q1 FY25 net interest income/pre-provision operating profit/profit after tax were at a variation of 4.6%/8%/31.9% versus our estimates. The results were much better than our expectations due to lower-than-estimated provisions. Loans and advances grew by 21.8% YoY on the back of growth across all verticals.
Deposits grew by 22.8% YoY, which was higher than advances growth, supported by 24.9% YoY growth in Retail TD. Sequentially, CASA growth was impacted by reduction from short term CA balance in the previous quarter.
Gross non-performing asset/net non-performing asset stood at 4.2% / 1.1% versus 3.8% / 1.1% in Q4 FY24.
We have estimated earnings CAGR of 49.8% over FY24-FY26E on the back of 18.3% CAGR in the loan book and lower credit cost. We have valued Bandhan Bank at 1.2 times its June 2026E ABV (same as earlier, a 57.4% discount to five-year average price/adjusted book value) and we have derived a target price of Rs 217 (versus Rs 212 earlier).
In our view, the stock will see an overhang in the near to medium term due to the following reasons:
End result of the detailed audit on the directions of NCGTC,
How the succession at the top management level takes shape,
Frequent IBPC transactions in the Housing portfolio can be a concern in the long term with respect to the quality of the book being originated and
Higher C/D ratio at 94.3% can constrain growth, but the same can be managed by tapping the refinancing route.
Maintain Accumulate.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
. Read more on Research Reports by NDTV Profit.
Most Related Links :
World News Era Governmental News Finance News