Bandhan Bank's Robust Deposits Drive Bullish Outlook; 46.5% Upside Expected

Bandhan Bank's latest business update for the quarter ended 31 March exceeded expectations, prompting bullish sentiments among brokerages.

The lender reported a 15.1 per cent quarterly growth in deposits, alongside a notable 25.1 per cent surge year-on-year. Additionally, its CASA growth showed strength, marking an 18 per cent increase both quarterly and year-on-year.

Nomura highlighted the significant growth uptick driven by improved microfinance (MFI) collections. The firm also emphasised strong deposit growth, particularly in retail and bulk deposits. Nomura maintained a target price of Rs 275 per share, signaling a 38.9 per cent upside from the current share price.

Jefferies observed improved deposit growth, particularly with wholesale deposits, and noted the lender's enhanced collection efficiency, reaching 99 per cent, along with moderated slippages. Jefferies set a target price of Rs 290 per share, indicating a 46.5 per cent upside.

Moreover, the approval from the Reserve Bank of India for Chandra Shekhar Ghosh to continue as MD and CEO until 9 July 2024, is seen as a significant positive trigger for the stock, according to Jefferies.

JP Morgan cautioned that uncertainties surrounding the Credit Guarantee Fund for Micro Units (CGFMU) audit could constrain the stock's movement in the short term.

On 4 April, Bandhan Bank shares surged by 4.2 per cent to close at Rs 197.95 per share. Despite this positive movement, the lender's shares have experienced a 3.6 per cent decline since 2024.