Shares of Bandhan Bank Ltd dropped 10% even after reporting a 35% jump in Q1 net profit from the previous year. Their June quarter results was aided by lower provisions, while brokerages remained divided on the lender's recovery prospects following a more conservative profitability outlook.
The private lender reported a standalone net profit of Rs 502 crore for the quarter ended June, up from Rs 372 crore a year earlier. Net interest income rose 6% year-on-year to Rs 2,921 crore, while the net interest margin remained steady at 6.2% sequentially.
Asset quality also improved, with gross NPA declining to 3.15% from 3.27% in the previous quarter and net NPA easing to 0.93% from 0.97%. A sharp reduction in provisions to Rs 683 crore, from Rs 1,147 crore a year ago, supported earnings growth.
The bank maintained its credit cost guidance at 1.6%-1.8%, but lowered its exit FY27 return on assets (RoA) guidance by 40 basis points to 1.2%-1.4%.
It expects the cost of funds and deposits to increase going forward, while guiding for EEB (Emerging Entrepreneurs Business) growth of 5%-10% and non-EEB growth of more than 20%. The bank also said it aims to maintain its net interest margin (NIM) at around 6.2%.
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