Bandhan Bank shares drop, Punjab National Bank gain ahead of Q4 results. Here's why

Shares of two banks Bandhan Bank and Punjab National Bank (PNB) moved in opposite directions ahead of their March quarter results later in the day. Bandhan Bank dropped 1.23 per cent to Rs 241 as the lender is expected to report 50-60 per cent drop in Q4 profits. PNB shares were up 0.66 per cent to Rs 48.80, as this PSU lender was expected to log multi-fold surge in Q4 profit.

Emkay Global estimates PNB's profit at Rs 1,254 crore, up 522 per cent YoY. It sees NII for PNB climbing 25.3 per cent YoY to Rs 9,149 crore. Prabhudas Lilladher expects PNB to log a three-fold jump in profit at Rs 621 crore compared with Rs 202 crore in the same quarter last year. NII is expected to grow 25.4 per cent YoY to Rs 9,157 crore from Rs 7,304 crore in the year-ago quarter. NIM is seen to improve 47 basis points to 2.99 per cent from 2.53 per cent YoY. Gross NPA is seen at 9.34 per cent against 9.7 per cent in December and 11.77 per cent in the year-ago quarter.

"NII and operating profit would be flattish sequentially; however, opex and provisions would remain elevated. Asset quality should come down due to recoveries/w.offs keeping GNPAs rise limited," Prabhudas Lilladher said.

In the case of Bandhan Bank, Emkay Global expects a 61.3 per cent YoY plunge in net profit at Rs 736.80 crore compared wit Rs 1,902 crore in the same quarter last year. NII for the quarter is seen at Rs 2,185 crore, down 14 per cent YoY over Rs 2,540 crore in the year-ago quarter. NIM is seen at 6.5 per cent, flattish on a sequential basis, but down 223 basis points over year-ago's 8.7 per cent.

"Growth has recovered but remains lower than expected. NIM should improve on a QoQ basis and, thus, support profitability. Slippages are expected to remain elevated, but higher write-offs are likely to reduce NPA ratio," Emkay Global said.

Nuvama Institutional Equities sees profit at Rs 850 crore, down 55 per cent YoY. NII is seen falling 3.8 per cent YoY to Rs 2,440 crore. This brokerage sees NIM at 7.3 per cent.

Watch: ITC share price falls after Q4 results; should you buy the dip? See what analysts say

Also read: SBI shares at Rs 800? This state-run bank has answers for capital, ECL questions

Also read: Can ITC shares make fresh highs after Q4 results? DII ownership, other factors to watch