Jeffries sees a 10% upside potential in Bandhan Bank on account of the bank’s improving loan, deposit growth and steady collections in Q2 FY24. Jefferies has given a ‘Buy’ rating on the scrip with an upside target price of Rs 280.
“In 2QFY24, Bandhan Bank’s loan growth improved to 12% year-on-year vs. 7% in 1Q. Retail deposit growth improved from 6% to 13% and casa growth from 3% to 7%. The recent hike in the savings deposit rate (c.50bps) may have helped, but there may be a slight drag on NIMs. Overall collection efficiency was stable at 98% with the MFI segment at 98% and the non-MFI segment at 99%, said Jefferies in its report.
The report said that, “We value Bandhan Bank at 1.6x Jun-25E adjusted book value per share (BVPS) to arrive at a price target of Rs 280.
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Bandhan Bank stock performance
Bandhan Bank’s market cap stands at Rs 40,497.99 crore. The stock price of Bandhan Bank fell 0.4% in the last one week, while it has surged 6.4% in the last one month and a whopping 23.2% in the last six months. The share price, however, tanked 6.9% in the last one year. The stock price hit its 52-week high of Rs 275.90 on October 7, 2022, while it touched its 52-week low of Rs 182.15 on March 28, 2023.
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The Jefferies’ report, however, cautioned about the potential risks which include further stress from the restructured book and a slowdown in loan growth.
