Bandhan Bank’s stock price rose 1.62% today. Analysts at Nomura group have maintained a ‘buy’ rating on Bandhan Bank stock with a target price of Rs 325 per share based on 1.7x Jun-25F P/B. The brokerage report said that “CASA deposits of the Bank declined by -8% q-q/-3% y-y, with CASA ratio at 36% (-330bp q-q / -720bp y-y). The collection efficiency of the Bank remained largely stable q-q at 98%.” Moreover, while Bandhan Bank’s soft loans experienced an increase of 7% year-on-year, it has witnessed a decline of 5% quarter-on-quarter.
Loss of Market confidence
Currently, Bandhan Bank’s trading valuation stands at 11.5x 1yr-fwd BVPS, which indicates a notable discount of around 60% compared to its average multiple of 3.5 times over the past five years. This decline in valuation largely stems from the bank’s weakened asset quality reported during the Covid pandemic. “It also reflects a wider loss of market confidence in the bank’s sustainable growth and profitability outlook,“ said the report.
Bandhan Bank stock call: ‘Buy’; Target Price Rs 325
The brokerage report has recommended ‘buy’ for the Bandhan Bank shares at the target price of Rs 325 based on 1.7x Jun-25F P/B. It has, however, placed a caveat by saying that further deterioration in asset quality and moderation in the loan growth may impede the target price.
Bandhan Bank Stock Performance
Bandhan Bank’s market cap stands at Rs 36,767.80 crore, and the P/E ratio is 16.51. The stock touched a 52-week high of Rs 314.75 on September 15, 2022, whereas a 52-week low of Rs 182.20 on March 28, 2023. Bandhan Bank’s share price has fallen 9.68% in the last month and nearly 6% year-to-date.