Copyright thehindubusinessline
Bandhan Bank shares tumbled 7 per cent to ₹158.58 on the NSE by afternoon trade on Friday, extending losses after an 88 per cent year-on-year crash in net profit to ₹112 crore for the September quarter missed analyst estimates by over 60 per cent. Axis Securities downgraded its target price to ₹165 from ₹195, maintaining a ‘Hold’ rating, citing persistent asset quality deterioration in the bank’s microfinance portfolio. The brokerage slashed earnings estimates by 49 per cent for FY26 and highlighted that stress in the bank’s Emerging Entrepreneurs Business (EEB) segment—expected to ease this quarter—has been delayed by another two months. Gross slippages in the EEB book remained elevated quarter-on-quarter. JM Financial cut its rating to ‘Reduce’ with a target of ₹165, noting that stress has spread beyond microfinance, with gross NPAs in the non-MFI portfolio jumping 11 per cent sequentially. The firm expressed concern over a 55 per cent surge in early-stage delinquencies (SMA-0) to ₹15.8 billion, though ₹6.5 billion was attributed to holiday effects. The bank reported net interest income of ₹2,589 crore, missing estimates of ₹2,643 crore, as margins compressed 55 basis points to 5.8 per cent. Gross NPA ratio held steady at 5 per cent while provisions more than doubled year-on-year to ₹1,153 crore. Management expects credit costs to normalise at 1.5-1.6 per cent only by FY27, contingent on improving collection efficiency in its microfinance operations. Published on October 31, 2025
