Key Points:
- Bandhan Bank shares rose 6% after Q3 profit jumped 83.9% sequentially to Rs 206 crore.
- Asset quality improved: gross NPA fell to 3.3%, net NPA to 1%, and deposits grew 11% YoY.
- Brokerages remain cautious due to weak year-on-year performance and structural challenges.
Bandhan Bank shares rose nearly six percent on Thursday after the lender posted a sharp sequential profit rebound for the December quarter, improving asset quality but drawing mixed reactions from brokerages over sustainability.
Bandhan Bank’s stock climbed in early trade on the BSE, reflecting investor relief after several weak quarters. The gains came despite the bank’s year-on-year performance remaining under pressure.
Shares Rally as Q3 Results Beat Sequentially
Bandhan Bank shares rose following the release of the bank’s third-quarter results for fiscal 2026, which showed a strong quarter-on-quarter rebound in profitability. The stock touched an intraday high of Rs 151.25 and opened at Rs 150.20, trading firmly above its previous close through the session. Bandhan Bank’s market capitalization stood at about Rs 24,320 crore.
Even with the rally, the shares remain well below their 52-week high of Rs 192.48, highlighting lingering concerns over the lender’s longer-term recovery.
The surge followed the release of the bank’s third-quarter results for fiscal 2026, which showed a strong quarter-on-quarter rebound in profitability. Investors responded positively to signs of operational stability after a prolonged period of stress in the bank’s loan book.
Profit, Margins Rise; Asset Quality Improves
Bandhan Bank shares rose after the bank reported an 83.9 percent quarter-on-quarter jump in standalone net profit to Rs 205.99 crore in the December quarter, aided by higher income and stable provisions. Total income rose 7.8 percent sequentially to Rs 6,122.24 crore.
Operating profit increased 10 percent from the previous quarter to Rs 1,445 crore, while provisions and contingencies remained flat at Rs 1,155 crore. Net interest income grew 3.8 percent to Rs 2,688 crore.
Net interest margin improved marginally to 5.9 percent from 5.8 percent in the September quarter, suggesting stabilization after earlier compression.
Asset quality showed marked improvement. Gross non-performing assets fell to 3.3 percent from 5 percent in the previous quarter, a decline of 169 basis points. Net NPA eased to 1 percent from 1.4 percent.
As of Dec. 31, 2025, total deposits stood at Rs 1.57 lakh crore, reflecting 11 percent year-on-year growth, indicating steady traction on the liabilities side.
Despite the sequential improvement, the year-on-year picture remained weak. Standalone net profit fell 51.79 percent from a year earlier, while total income declined 7.11 percent, underscoring the depth of the slowdown faced earlier in the fiscal year.
Brokerages Stay Cautious Despite Sequential Gains
Brokerage views remained divided, with analysts weighing near-term improvement against structural challenges.
Macquarie maintained an Underperform rating with a target price of Rs 130, saying the profit beat was driven largely by higher other income. The brokerage added that slippages remain elevated, keeping credit costs under pressure.
UBS retained a Neutral rating and a target of Rs 180, citing sequential improvement across key metrics. It said it expects loan growth of 15 percent to 17 percent over the medium term.
CLSA reiterated its Accumulate call with a target of Rs 190, noting that margins appear to have stabilized after two weak quarters. The brokerage highlighted improving slippages, particularly in the microfinance portfolio.
Nomura kept a Neutral rating and cut its target price to Rs 160, saying asset quality recovery continues to lag peers and near-term catalysts remain limited. JP Morgan also maintained a Neutral stance and trimmed its target price to Rs 148.
The mixed outlook suggests that while Bandhan Bank shares rose on Q3 results, easing immediate concerns, investors and analysts remain cautious about the durability of the turnaround.
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