Add Bandhan Bank, target price Rs 282: Arihant Capital Markets

Arihant Capital Markets has add call on Bandhan Bank with a target price of Rs 282. The current market price of Bandhan Bank Ltd. is Rs 230.7 .

Bandhan Bank Ltd., incorporated in the year 2014, is a banking company (having a market cap of Rs 37354.13 Crore).

Financials

For the quarter ended 30-09-2022, the company has reported a Standalone Total Income of Rs 4249.87 Crore, down -3.08 % from last quarter Total Income of Rs 4385.05 Crore and up 15.72 % from last year same quarter Total Income of Rs 3672.51 Crore. The bank has reported net profit after tax of Rs 209.27 Crore in latest quarter.

Investment Rationale
The credit demand at the bank is supposed to increase because of the ongoing festive/wedding season. Furthermore, the brokerage expects credit demand to increase further in Q4 on the back of agricultural demand, which will also increase the collection efficiency from 98% to over 100%. Thus, collection efficiency and slippages will be under control.

Net interest margins (NIMs) of the bank have declined QoQ in Q2 to 7.0% vs 7.5% largely due to a one-off interest reversal in one large account. Nevertheless, the bank management do not foresees any more large accounts to downgrade going forward.

Promoter/FII Holdings
Promoters held 39.99 per cent stake in the company as of 30-Jun-2022, while FIIs owned 35.64 per cent, DIIs 7.12 per cent.