Bandhan Bank sinks as profit misses estimates and brokerages cut target prices

Bandhan Bank’s share worth declined eight p.c on October 31 after the personal sector lender posted a web revenue of Rs 209 crore for the September quarter in opposition to a lack of Rs 3,008 crore a 12 months in the past, far beneath Avenue expectations.

In line with a CNBC-TV18 ballot, analysts had anticipated web revenue at Rs 749.8 crore.

At 9:46 am, Bandhan Financial institution was quoting at Rs 244.95, down Rs 20.25 or 7.64 p.c. The share touched its 52 week excessive of Rs 349.50 and 52 week low of Rs 229.65 on 17 Might 2022 and 27 December 2021 respectively. It’s now buying and selling 29.91 p.c beneath its 52 week excessive and 6.66 p.c above its 52 week low.

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Internet curiosity revenue grew 13.3 p.c year-on-year to Rs 2,193 crore, beneath expectations of Rs 2,422.9 crore.

Internet curiosity margin (NIM) slipped 100 foundation factors quarter-on-quarter to seven p.c from eight p.c. Asset high quality confirmed little or no enchancment with gross web performing property (NPA) at 7.2 p.c versus 7.3 p.c 1 / 4 in the past and web NPA flat at 1.9 p.c.

With slippages throughout the quarter in evaluation at Rs 3,954 crore, analysts anticipate credit score prices, which stood at 5.3 p.c as in opposition to 2.7 p.c within the June quarter, to stay excessive.

Chatting with CNBC-TV18, high boss on the financial institution Chandra Shekhar Ghosh mentioned: “Slippages have come from pandemic-restructured accounts. A number of the slippages will proceed within the coming quarters. NIM will stay between 7.5-8 p.c and can normalise within the subsequent two quarters.”

Analysts at home brokerage agency Motilal Oswal Monetary Companies have reduce their FY23/FY24 earnings estimate by 18/11 p.c. They’ve a impartial ranking on the inventory with a goal worth of Rs 300.

With a purchase name on the inventory, Financial institution of America Securities has reduce its goal worth to Rs 355 per share. It has lowered earnings per share (EPS) estimates by 20-30 p.c on decrease NIMs and better provisions.

In the meantime, Credit score Suisse has trimmed goal worth on the inventory to Rs 330 from Rs 360. It expects credit score prices to average within the second half of this fiscal however has reduce FY23-25 EPS estimates by 9-19 p.c.

(Disclaimer: The views and funding ideas expressed by specialists on Moneycontrol.com are their very own and never these of the web site or its administration. Moneycontrol.com advises customers to test with licensed specialists earlier than taking any funding choices.)

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