Bandhan Bank Ltd.'s shares fell Wednesday as the lender's loan growth moderated and recoveries fell sequentially in the quarter ended June and its chief financial officer quit.
Total advances rose 6.7% year-on-year but fell 5.5% over the previous quarter to Rs 1.03 lakh crore in the quarter ended June, according to its update. Chief Financial Officer Sunil Samdani also quit and will leave on Sept. 30 to "explore professional opportunities outside the bank". The bank is searching for a replacement.
Q1FY24 Business Updates
Total loans and advances rose 6.7% YoY but fell 5.5% QoQ to Rs 1.03 lakh crore.
Total deposits increased 16.6% YoY and 0.4% QoQ to Rs 1.08 lakh crore.
CASA deposits fell 2.8% YoY and 8% QoQ to Rs 39,076 crore.
Retail deposits increased 5.9% YoY to Rs 77,329 crore.
Bulk deposits grew 55.4% YoY and 0.4% QoQ to Rs 31,240 lakh crore.
Pan-bank collection efficiency increased to 98% from 96% a year earlier but fell sequentially from 99%.
Liquidity coverage ratio stands at 174.68% as on June 30.
Jefferies, however, maintained its 'buy' rating on Bandhan Bank and set a target price of Rs 340, a 44% potential upside.
The research firm attributed the sequential moderation in loan growth to rundown of Scheduled Tribe loans and conversion of current and savings accounts into term deposits.
Loan collection fell to 98% versus 99% in January-March but was higher than a year earlier.
The brokerage values the lender at an estimated 2.0x book value of March 2025 to arrive at its price target of Rs 340. It cited stress from the restructured book and slowdown in loan growth as key risks. And a smooth succession is key for the lender after the CFO's resignation, it said.
Shares of the company fell 4.32% compared with a 0.04% decline in the Nifty 50 at 10:48 a.m.
The total traded quantity so far in the day stood at 10.8 times the 30-day average volume. The stock's relative strength index stands at 31.35, indicating that is neither oversold nor overbought.
Of the 28 analysts tracking the stock, 22 maintain a 'buy', four recommend a 'hold', and two suggests a 'sell', according to Bloomberg data. The average of analyst price targets indicates a 33.1% upside over the next 12 months.
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