Weak Q2 performance drags Bandhan Bank shares down 6%; buy, sell or hold?

Bandhan Bank share price: Private lender Bandhan Bank share price was under pressure on Friday, October 31, 2025, with the scrip falling up to 5.93 per cent to hit an intraday low of ₹160.40 per share.

 

At 10:45 AM, Bandhan Bank share price was trading 5.60 per cent lower at ₹160.95. In comparison, BSE Sensex was trading 0.28 per cent lower at 84,168.42 levels.

 

Why did Bandhan Bank share price drop today?

 

Bandhan Bank’s share price declined after the private lender reported a weak set of numbers for the September quarter of FY26 (Q2FY26).

 

The bank’s net profit plunged to ₹112 crore in Q2FY26 from ₹937 crore in the same period last year, hurt by higher provisions and lower income. Operating profit also dropped sharply to ₹1,310 crore from ₹1,855 crore a year ago.

 

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Net interest income (NII) fell 12 per cent year-on-year (Y-o-Y) to ₹2,589 crore from ₹2,934 crore in the corresponding quarter of FY25. Provisions and contingencies surged to ₹1,153 crore, nearly double the ₹606 crore reported in the year-ago period.

 

The bank’s provision coverage ratio (PCR) stood at 73.7 per cent as of September 30, 2025.

 

"Bandhan Bank's current quarter performance reflects a transitional phase for the bank as we continue to realign towards a more diverse and resilient portfolio. As we drive this transformation, we are looking to achieve a balanced profitable growth to drive sustainable long term value creation for our stakeholders,” said Partha Pratim Sengupta, managing director and CEO of Bandhan Bank said.

 

“By focusing on innovation in technology, refining our processes, and enhancing products and people capabilities, we are well-positioned to drive the next phase of growth for Bandhan Bank 2.0," he added.

 

Notably, the bank added 9 lakh new customers during the September quarter and employs over 73,500 people. Its deposit base stood at ₹1.58 trillion, while advances reached ₹1.40 trillion.

 

Bandhan Bank stock: Buy, sell or hold?

 

Emkay: Analysts at Emkay noted persistent asset-quality stress during the quarter, while upcoming state elections in Bihar could further affect collections. The brokerage expects margins and asset quality to stabilise from Q4FY26 onwards. 

 

Factoring in the earnings miss and structural margin pressures, it cut FY26-28 earnings estimates and now expects return on assets (RoA) to fall to 0.7 per cent in FY26 (from 1.5 per cent in FY25) before improving gradually.

 

Thus, Emkay analysts retained an ‘Add’ rating with a target price of ₹190, suggesting the stock suits investors willing to endure short-term challenges for long-term gains.

 

JM Financial: Bandhan Bank’s Q2FY26 PAT fell 70 per cent Q-o-Q – around 66-70 per cent below estimates – due to higher stress in the MFI segment, sharper-than-expected margin compression (50 bps Q-o-Q), and weak fee income amid muted loan growth. 

 

Gross NPAs in the non-MFI book rose 11 per cent Q-o-Q, indicating broader stress.

 

Therefore, JM Financial maintains a cautious view, expecting credit costs of ~2.5 per cent for FY26-27 despite management’s lower guidance. EPS estimates for FY26 have been cut by 21 per cent, while FY27-28 forecasts are slightly raised on higher growth expectations.

 

The brokerage, thus, downgraded the stock to ‘Reduce’ with a revised target price of ₹165 (from ₹173), valuing it at 0.9x FY27 BVPS, citing ongoing margin and asset-quality pressures.

 

Bandhan Bank, one of India’s fastest-growing private lenders, began operations as a universal bank on August 23, 2015. As of September 30, 2025, Bandhan Bank operates nearly 6,350 outlets across 35 states and union territories, serving over 3.23 crore customers.