Hold Bandhan Bank; target of Rs 383: Arihant Capital

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Arihant Capital 's research report on Bandhan Bank

Bandhan bank reported good operating performance during Q1FY21 with improvement in collection efficiency. Bottomline of the bank was impacted because the bank has accelerated additional provisioning on standard advances at Rs 750 cr in order to strengthen the balance sheet. With this additional provision buffer, the bank now holds total additional provision of Rs 1,769 cr, well beyond the RBI’s prescribed limit. The bank has witnessed healthy business growth with advances growth at 18% YoY and deposit growth at 35% YoY.

Outlook

Marginal improvement seen on asset quality front as GNPA ratio fell by 5bps QoQ to 1.43% while NNPA improved by 10bps QoQ to 0.48%. We change our rating to Hold from Buy with a revised TP of Rs 383 (from Rs 281 earlier).

For all recommendations report, click here

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