Bandhan Bank rallies after brokerage raises target price

Bandhan Bank jumped 4.42% to Rs 148.95 after a domestic brokerage upgraded the stock to a 'Buy' rating.

The brokerage set a target price of Rs 175 per share, implying an upside potential of nearly 23% from the stocks previous closing price of Rs 142.46. The domestic brokerage said that the firms Q3 results were more or less in line with estimates. Bandhan has undergone a long-drawn NPA cycle, which significantly impacted its growth and profitability profile. As a result, the bank delivered a tepid 8% avg. RoE over the past five years, it said

The brokerage expects the banks operating performance to recover in the coming quarters, with asset quality regaining normalcy and margins stabilizing

 

Another domestic brokerage noted that the companys net profit missed its estimate despite strong operating performance, primarily due to elevated credit cost which was expected to moderate during the quarter following the NPA sale.

However, given the current valuation of 0.7x FY28 P/B, the brokerage believes that the downside potential in the stock looks limited. Accordingly, it upgraded the stock to Add, and increased its target price to Rs 160 apiece.

The bank reported a 83.9% jump in standalone net profit to Rs 205.99 crore on 7.8% increase in total income to Rs Rs 6,122.24 crore in Q3 FY26 over Q2 FY26.

Operating profit was Rs 1,445 crore in Q3 FY26 compared to Rs 1,310 crore in Q2 FY26, up 10% . The provisions (other than tax) & contingencies charged to the Profit and Loss for Q3 FY26 were at Rs 1,155 crore, flat QoQ

Net interest income (NII) as of Q3 FY26, stood at Rs 2,688 crore compared to Rs 2,589 crore as of Q2 FY26, representing a growth of 3.8% QoQ. Net Interest Margin (NIM) for the quarter was 5.9% in Q3 FY26, compared to 5.8% in Q2 FY26

On asset quality front, gross non-performing assets (GNPA) reduced by 169 bps to 3.3% in Q3 FY26 from 5% in Q2 FY26. Net NPA fell by 38 bps to 1% in Q3 FY26 from 1.4% in Q2 FY26.

On a year on year (YoY) basis, the companys standalone net profit and total income declined 51.79% and 7.11%, respectively in Q3 FY26.

As of December 31, 2025, total deposits stood at Rs 1.57 lakh crore, compared to Rs 1.41 lakh crore in the previous year, reflecting a year-on-year growth of 11%.

CASA Deposits stood at Rs 42,730 crore and CASA Ratio stood at 27%, CASA + Retail TD to total deposit ratio stands above 72%.

Gross advances jumped 10% to Rs 1.45 lakh crore as of 31st December 2025 compared with Rs 1.32 lakh crore as of 31st December 2024. On a YoY basis, Retail book (other than housing) grew 57%, Wholesale Banking grew 32%, and the Housing book showed a growth of 10% (excluding IBPC).

The collection efficiency for EEB loans was higher at 98.2% for Q3 FY26. Provision Coverage Ratio (Including Technical Write-offs) as of December 31, 2025, is 84.3%.

MD & CEO, Partha Pratim Sengupta said, "Bandhan Banks third quarter performance over the last quarters reflects the strengthening fundamentals and steady turn around. In Q4, we are set to accelerate multiple digital initiatives aimed at enhancing customer experience, operational efficiency, and scalability. We remain fully committed to building a strong, more resilient and more diversified bank. These efforts position us well for sustainable and profitable growth going forward.

Bandhan Bank is a private sector bank. The banks distribution network spans more than 6,350 outlets. The Bank currently has more than 74,500 employees.

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