Bandhan Bank's shares plummeted by 10% following the announcement of its Q1 FY27 results, which revealed a 35% year-on-year increase in net profit to Rs 502 crore. The profit surge was primarily due to a significant 41% reduction in provisions.
Despite the rise in net profit, Bandhan Bank's asset quality showed improvement, with the gross non-performing assets ratio reducing to 3.15% from 4.96% a year earlier. The bank attributed increased staff and technology expenses to the new labor costs and the West Asia crisis.
Motilal Oswal Financial Services downgraded Bandhan Bank's shares to 'Neutral', citing a cut in RoA guidance due to global macroeconomic uncertainties and competitive deposit pricing.
“Higher staff expenses on account of the new labour cost and a 65% rise in tech cost following the West Asia crisis led to the surge in expenditure.”
Partha Pratim Sengupta, Managing Director
Motilal Oswal also adjusted its earnings estimates for Bandhan Bank, reducing expectations for FY27 and FY28 by 14% and 6%, respectively. The brokerage now anticipates the bank to achieve an RoA of 1% in FY27 and 1.4% in FY28.
Bandhan Bank's stock has experienced a 4% decline over the past week, closing at Rs 208.83. Despite this, the stock has risen approximately 44% in 2026, although it remains down 5% over three years and 32% over five years. The bank's market capitalization stands at Rs 33,430 crore.
“The lower credit cost helped the bank book higher net profit.”
Partha Pratim Sengupta, Managing Director
Background
The recent performance of Bandhan Bank highlights the challenges faced by the banking sector amid global economic uncertainties. Investors will be closely monitoring the bank's strategies to navigate these challenges and its future financial performance.
The recent performance of Bandhan Bank highlights the challenges faced by the banking sector amid global economic uncertainties. Investors will be closely monitoring the bank's strategies to navigate these challenges and its future financial performance.
