Bandhan Bank slips 7% on heavy volumes ahead of Q4 results on Friday

Bandhan Bank stock price: Average trading volume on the counter surged nearly two-fold with a combined 33.86 million equity shares, representing 2 per cent of total equity of the bank, changing hands

Bandhan Bank stock price slipped 7 per cent to Rs 176.55 on the BSE in Thursday's intraday trade amid heavy volumes, ahead of its March quarter earnings on Friday, May 17, 2024. The stock of the private sector lender was trading close to its 52-week low of Rs 170.35, touched on April 19.

At 02:27 PM Bandhan Bank was quoting 6 per cent lower at Rs 178.25, as compared to 0.32 per cent decline in the S&P BSE Sensex. Average trading volume on the counter surged nearly two-fold with a combined 33.86 million equity shares, representing 2 per cent of total equity of the bank, changing hands on the NSE and BSE so far in trade.

"The board of directors of Bandhan Bank is scheduled to be held on Friday, May 17, 2024, at Kolkata, to, inter alia, consider and approve the audited financial results of the Bank for the quarter (Q4) and financial year ended March 31, 2024, and to consider recommending dividend, if any," Bandhan Bank said in an exchange filing.

Meanwhile, thus far in the calendar year 2024, the stock price of Bandhan Bank has fallen by 27 per cent, as compared to 1 per cent rise in the S&P BSE Sensex.

Chandra Shekhar Ghosh, managing director and chief executive officer (MD and CEO) of the Bandhan Bank, on April 5, said that he would retire after the completion of his current tenure on July 9. Ghosh has led the bank since July 10, 2015.

The resignation of Ghosh from the MD & CEO position of Bandhan Bank is considered a negative surprise for the lender, which was looking at a sustainable recovery in the financial year 2025. Ghosh has been the founder and instrumental in the overall functioning of the lender, and, therefore, his resignation could significantly alter the business growth and profitability of the bank, according to analysts.

"Bandhan continues to grapple with asset quality concerns, especially in the Emerging Entrepreneurs Business (EEB) book, while most of its peers have shown remarkable improvement in asset quality. While the Q4FY24 provisional numbers indicate strong growth in terms of both advances and deposits and collection efficiency remaining steady at ~99 per cent in both the EEB and nonEEB segments, the uncertainty around the management succession and the potential challenges in terms of growth strategy for the bank will result in a further de-rating of the stock," analysts at Axis Securities said.

CS Ghosh's retirement as MD and CEO will create ambiguity in the bank's future strategy until the new MD and CEO takes charge, analysts at KR Choksey Shares and Securities added.

The brokerage firm expects a complete change in the bank's strategy with a new management, it has been witnessing asset quality pressure in its MFI portfolio since the Covid-19 pandemic, they said.