Bandhan Bank Shares Fall As Most Analysts Maintain 'Sell' After Q1 Profit Drop

Ambit Capital Pvt.

• Maintains ‘sell’ with a target price of Rs 155.

• Asset quality deterioration is seen across the board.

• Microfinance's annualised slippage rate was 11%.

• The overall elevated credit cost stood at 2.4% versus management's guidance of 1.8–2.2% for FY24.

• Assets under management growth is much lower than the stated guidance of 20% year-on-year.

• Deposit mobilisation looks challenging for the bank, with a CASA decline of 3% YoY.

• Expected RoE of less than 15% in FY24–25.

Investec

• The brokerage reiterates ‘sell’ with the target price revised from Rs 200 to Rs 180.

• Weak quarter due to the seasonality of the MFI portfolio, leading to weaker pre-provisional operating profit and higher asset quality stress.

• A pivot to the secured portfolio weakens operating performance.

• Overall advances grew by 6.7% YoY.

• Growth remains weak in both MFI and CASA.

• Estimate lower normalised growth of 16% and RoE of 14%.

Nomura

• The brokerage maintains ‘buy’ with the target price reduced from Rs 325 to Rs 270.

• Profit after tax was ahead of estimates, with the beat largely led by a sharply lower credit cost of 2.6%.

• The PAT beat was aided by a lower provisioning coverage ratio of 69%.

• The brokerage said that the recoveries from the credit guarantee fund for microunits will be a key monitorable over the near term.

• Pick-up in growth outlook is essential for re-rating.

• Cuts overall loan book estimates by 3% across FY24–26F.

• Expected RoE of 18-19% over FY24-26F.