Bandhan Bank shares increased 4% today after stockbroker Jefferies assigned a buy call with a target price of Rs 430. The buy appeal comes amid Assam’s flood scenario, in which 81 people have died and over 45 lakh people have been affected in 32 of the state’s 34 districts.
Another brokerage, Axis Securities, has set a one-year target price of Rs 343 for the stock.
Bandhan Bank’s stock reached an intraday high of Rs 287, up 4.71 percent from the previous closing of Rs 274.10 on the BSE. The stock of Bandhan Bank is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.
The stock has risen 11% this year but lost 18% in the previous year.
On the BSE, 4.27 lakh shares of the company changed hands, resulting in a turnover of Rs 12.04 crore. On the BSE, the company’s market capitalization was Rs 45,335 crore.
On June 28, 2021, the stock reached a 52-week high of Rs 354.10 and a 52-week low of Rs 229.65 on December 27, 2021.
At 3:09 p.m., the banking stock was trading 2.66 percent higher on the BSE at Rs 281.40.
According to Jefferies, the banking stock is up 57% from the previous BSE close. According to the brokerage, the Assam floods will have a short-term impact on sales and collections.
Assam accounts for 6% of total loans and 9% of EEB loans; a 500-bps increase in credit costs in Assam would reduce FY23 earnings before tax by 5%. According to Jefferies, the flood might have an impact on the bank’s MFI business over the next 3-4 weeks. Axis Securities is also optimistic about the stock’s future.
The improvement in collection trends, particularly in Assam and West Bengal, as well as the overall reduction in stressed assets, is encouraging. Diversifying the portfolio by reducing the share of group EEB loans will increase the overall book’s stability. The bank’s capital remains adequate to support medium-term growth. The firm recommended a BUY rating on the stock with a target price of Rs 343/share, representing a 10% increase from the current market price.
Net profit increased 1,747 percent to Rs 1,902.3 crore in Q4 FY21, up from Rs 103 crore in Q4 FY21.
Bandhan Bank’s loan portfolio increased by 14.1% year on year, while deposits increased by 23.5%. Its current account savings account (CASA) increased by 18.5% year on year. Gross non-performing assets (GNPA) decreased to 6.46 percent, down from 10.81 percent on December 31, 2021.