Buy Bandhan Bank, target price Rs 425: Motilal Oswal
Bandhan Bank Ltd., incorporated in the year 2014, is a banking company (having a market cap of Rs 50651.66 Crore).
By ETMarkets.com | Updated:
Promoters held 61 per cent stake in the company as of June 30, 2020, while FIIs held 14.5 per cent, DIIs 8 and public and others 16.6 per cent.
Motilal Oswal has given a buy rating to Bandhan Bank with a target price of Rs 425. The share price moved up by 2.78 per cent from its previous close of Rs 314.50. The stock’s last traded price is Rs 323.25.
Bandhan Bank Ltd., incorporated in the year 2014, is a banking company (having a market cap of Rs 50651.66 Crore).
Financials The Bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs 1006.67 Crore (.00 % of total assets) and Net Non Performing Assets (Net NPAs) of Rs 335.78 Crore (.00% of total assets). For the quarter ended 30-06-2020, the company has reported a Standalone Interest Income of Rs 2621.96 Crore, up 6.44 % from last quarter Interest Income of Rs 2463.24 Crore and up 14.91 % from last year same quarter Interest Income of Rs 2281.71 Crore. The bank reported net profit after tax of Rs 549.82 Crore in latest quarter.
Investment Rationale The brokerage expects LGD to remain lower (v/s peers) given Bandhan’s strong market share and higher unique customer base. Nevertheless, it estimates credit cost of 2.7% for FY21, of which ~1.2% has already been recorded in 1QFY21 (1.6% in 4QFY20). It maintains a Buy rating, with unchanged TP of INR 425 (3.2x FY22E BV). Promoter/FII Holdings Promoters held 61 per cent stake in the company as of June 30, 2020, while FIIs held 14.5 per cent, DIIs 8 and public and others 16.6 per cent.
