Bandhan Bank shares on a roll post Q4 results! What should investors do?
On Monday, the scrip closed 6.73 per cent higher at Rs 338.75 against the previous close of Rs 317.40. Market cap of the bank rose to Rs 54,564.98 crore.
- May 17, 2022,
- Updated May 17, 2022 7:31 AM IST
Shares of Bandhan Bank are on a roll after the bank posted a robust set of numbers for the quarter ended March 2022. The net profit jumped a whopping 1,747 per cent to Rs 1,902.3 crore from Rs 103 crore in Q4 FY21.
On Monday, the scrip closed 6.73 per cent higher at Rs 338.75 against the previous close of Rs 317.40. Market cap of the bank rose to Rs 54,564.98 crore.
Bandhan Bank’s loan portfolio grew 14.1 per cent year-on-year, while deposits grew 23.5 per cent. Its current account savings account (CASA) grew 18.5 per cent on-year, while gross non-performing assets (GNPA) reduced to 6.46 per cent, against 10.81 per cent as on December 31, 2021.
Net NPA was at 1.66 per cent on March 31, 2022 against 3.01 per cent as on December 31, 2021.
Axis Securities noted that the improvement in collection trends especially in the key states of Assam and West Bengal along with reduction in overall stressed assets has been the key highlight of the quarter. In absence of any further unforeseen disruption, the brokerage house expects the EEB book to perform well going forward.
It believes that the diversification of the portfolio by reducing the share of the group EEB loans will lend higher stability to the overall book.
The bank remains well capitalised to fuel its medium-term growth. Also, improving NIMs and credit costs gravitating to near pre-COVID levels will aid RoA expansion.
"We raise our FY23/24E EPS estimates by 21/18 per cent respectively and expect Bandhan to deliver a RoA/RoE of 3.2/24.5 per cent by FY24E. We upgrade our rating to BUY from HOLD and value Bandhan at 2.4x FY24E ABV and arrive at a target price of Rs 400 per share," it added.
Motilal Oswal also said that the bank reported a strong 4QFY22, with a PAT of Rs 1,900 crore (significant beat), led by robust NII and negligible provisions.
The brokerage firm highlighted that the management has demonstrated healthy progress in improving asset quality, while business growth has picked up sharply.
It has raised the FY23/FY24 earnings estimate sharply by 23 per cent/17 per cent, factoring in lower credit costs and a recovery in growth.
Also read: Bandhan Bank Q4 results: Net profit jumps 1747% to Rs 1,902.3 cr
Shares of Bandhan Bank are on a roll after the bank posted a robust set of numbers for the quarter ended March 2022. The net profit jumped a whopping 1,747 per cent to Rs 1,902.3 crore from Rs 103 crore in Q4 FY21.
On Monday, the scrip closed 6.73 per cent higher at Rs 338.75 against the previous close of Rs 317.40. Market cap of the bank rose to Rs 54,564.98 crore.
Bandhan Bank’s loan portfolio grew 14.1 per cent year-on-year, while deposits grew 23.5 per cent. Its current account savings account (CASA) grew 18.5 per cent on-year, while gross non-performing assets (GNPA) reduced to 6.46 per cent, against 10.81 per cent as on December 31, 2021.
Net NPA was at 1.66 per cent on March 31, 2022 against 3.01 per cent as on December 31, 2021.
Axis Securities noted that the improvement in collection trends especially in the key states of Assam and West Bengal along with reduction in overall stressed assets has been the key highlight of the quarter. In absence of any further unforeseen disruption, the brokerage house expects the EEB book to perform well going forward.
It believes that the diversification of the portfolio by reducing the share of the group EEB loans will lend higher stability to the overall book.
The bank remains well capitalised to fuel its medium-term growth. Also, improving NIMs and credit costs gravitating to near pre-COVID levels will aid RoA expansion.
"We raise our FY23/24E EPS estimates by 21/18 per cent respectively and expect Bandhan to deliver a RoA/RoE of 3.2/24.5 per cent by FY24E. We upgrade our rating to BUY from HOLD and value Bandhan at 2.4x FY24E ABV and arrive at a target price of Rs 400 per share," it added.
Motilal Oswal also said that the bank reported a strong 4QFY22, with a PAT of Rs 1,900 crore (significant beat), led by robust NII and negligible provisions.
The brokerage firm highlighted that the management has demonstrated healthy progress in improving asset quality, while business growth has picked up sharply.
It has raised the FY23/FY24 earnings estimate sharply by 23 per cent/17 per cent, factoring in lower credit costs and a recovery in growth.
Also read: Bandhan Bank Q4 results: Net profit jumps 1747% to Rs 1,902.3 cr