Bandhan Bank shares declined 2.36 per cent on Monday, closing at Rs 182.61, after the bank reported a 65 per cent drop in net profit to Rs 372 crore for the first quarter of FY26 on Friday. Following this development, should you buy or sell the stock? Here is what analysts at global brokerages say:
Bandhan Bank Q1 FY26 financial highlights
- Net Profit: Rs 372 crore, down 65 per cent from Rs 1,063 crore in Q1 FY25
- Total Income: Rs 6,201.49 crore, up from Rs 6,081.73 crore in the same quarter last year
Despite the sharp decline in profit, several global brokerage firms are positive on the bank’s stock.
2 brokerages recommend buying Bandhan Bank shares — Note down targets
Analysts at Jefferies and CLSA have recommended buying Bandhan Bank shares for long-term target prices of Rs 215 and Rs 220, respectively.
Jefferies noted that the bank’s profit of Rs 400 crore exceeded expectations. However, the brokerage also cautioned that stress in the microfinance (MFI) segment remains elevated. Additionally, the bank’s loan growth came primarily from safer but lower-margin segments, putting pressure on the Net Interest Margin (NIM), it said.
CLSA called the Q1 performance ‘mixed’ and highlighted that:
- Improvement in slippages
- Growth in the Special Mention Account (SMA) book
- Loan book contraction due to continued challenges in the MFI segment
Macquarie, JP Morgan have mixed views; check out ratings
Macquarie has maintained an ‘outperform’ rating on the private lender stock with a target price of Rs 210. The brokerage noted that elevated slippages and higher write-offs have driven up credit costs, and expects NIM to remain under pressure in the near term.
In contrast, JP Morgan has retained a ‘neutral’ stance with a target price of Rs 155. The firm also said that:
- NIM and Pre-Provision Operating Profit (PPOP) margins are likely to stay under pressure for the next few quarters
- A loan mix shift towards secured lending over microfinance could lower yields
- Management guidance suggests that credit costs and NIM could remain weak in Q2, with a potential recovery in H2 FY26
(Disclaimer: The views/suggestions/recommendations expressed here in this article are solely by investment experts. Zee Business suggests its readers consult their investment advisers before making any financial decision.)
