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Despite Assam floods, Jefferies sees 57% upside in Bandhan Bank stock

Despite Assam floods, Jefferies sees 57% upside in Bandhan Bank stock

Bandhan Bank stock touched an intraday high of Rs 287, rising 4.71 per cent against the previous close of Rs 274.10 on BSE.

Bandhan Bank stock is trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages. Bandhan Bank stock is trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

Shares of Bandhan Bank rose 4 per cent today after brokerage Jefferies assigned a buy call with a target price of Rs 430.  The buy call comes amid the flood situation in Assam where death toll has reached 81 and over 45 lakh people have been affected in 32 of the state's 34 districts.

Another brokerage Axis Securities has assigned a target price of Rs 343 for a period of one year.

Stock of Bandhan Bank touched an intraday high of Rs 287, rising 4.71 per cent against the previous close of Rs 274.10 on BSE. Bandhan Bank stock is trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

The stock has gained 11 per cent this year but lost 18 per cent in a year.

Total 4.27 lakh shares of the firm changed hands amounting to a turnover of Rs 12.04 crore on BSE. The market cap of the firm stood at Rs 45,335 crore on BSE.

The stock hit a 52-week high of Rs 354.10 on June 28, 2021 and a 52-week low of Rs 229.65 on December 27, 2021.

At 3:09 pm, the banking stock was trading 2.66 per cent higher at Rs 281.40 on BSE.

Jefferies sees a 57 per cent upside in the banking stock against the previous close of BSE.

The brokerage said floods in Assam will have near-term impact on business and collections.

"Assam forms 6 per cent of total loans and 9 per cent of EEB loans; 500 bps higher credit costs in Assam would impact FY23 profit before tax by 5 per cent.  The flood could impact bank's MFI business for next 3-4 weeks," said Jefferies in a report. Axis Securities is also bullish on prospects of the stock.

"The improvement in collection trends especially in Assam and West Bengal along with a reduction in overall stressed assets is encouraging. 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.  We recommend a BUY rating on the stock with a target price of Rs 343/share, implying an upside of 10 per cent from the current market price," the brokerage said in report.

In Q4 of the last fiscal, net profit zoomed a whopping 1,747 per cent to Rs 1,902.3 crore from Rs 103 crore in Q4 FY21.

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. Gross non-performing assets (GNPA) fell to 6.46 per cent, against 10.81 per cent as on December 31, 2021.