Bandhan Bank Ltd. share price target

Bandhan Bank has delivered a stellar set of numbers in 4QFY19, ahead of our expectation. It has reported strong numbers on all fronts asset quality, AUM growth, profitability and margin. PAT jumped substantially by 68% YoY to Rs 651 cr, supported by strong topline growth. Strong AUM growth of 33% YoY, led to 46% YoY growth in NII resulting into sharp uptick in NIM. Robust growth in other income and higher margin with normal credit costs enabled Bandhan to deliver +5% RoA during the quarter. Asset quality trend continued to improve as GNPAs declined by 37bps QoQ to 2% (Ex-IL&FS; 1%), and PCR was...

micro loans reported growth of 40%. Non-micro loan AUMs growth was at 37.3% yoy. Liabilities of the bank are gaining more traction CASA touching 41%, retail to total deposits forming 77.4%. Margins improved further during the quarter from 10.5% to 10.7% led by improvement...

Traction in business decelerated marginally though it remained healthy at ~30% YoY. Healthy customer acquisition at ~23% YoY to 95 lakh & 14% YoY increase in average ticket size to | 59700 led to AUM growth 38.5% YoY. Micro & non micro segment grew ~40% YoY & ~31% YoY, respectively, though deceleration is seen compared to previous run rate. Deposit saw healthy traction of 27.6% YoY to | 43232 crore, led by robust growth of 49% YoY & 54% YoY in current & savings deposit while retail term...

Absolute GNPA surged more than doubling to | 8310 crore, led by prudent recognition of entire | 388 crore of exposure to IL&FS; group. Accordingly, GNPA ratio increased ~112 bps QoQ to 2.41% Bank has made full provision of ~| 385 crore. This has kept overall credit cost higher, which has impacted growth in profitability. Therefore, PAT came in at | 331 crore, up 10% YoY. It had reversal of MTM provision of ~| 96 crore in Q3FY19. Customer acquisition remained robust with 9.22 lakh customers...

Operationally good quarter for the bank, PAT grew by 47% yoy driven by strong loan growth and stable margins. Other income showed flat growth more due to change in the recognition of PSLC income. AUM growth was strong at 51%, margins remained stable at 9% which led to...

ICICI Securities Ltd | Retail Equity Research AUM growth continued to remain robust at 51% YoY to | 33373 crore. Micro loans (form 86% of advances) grew 47.3% YoY to | 28974 crore, while non micro loans grew 80.2% YoY NII growth continued to remain robust at 55.4% YoY to | 1077 crore led by AUM growth and strong margins at ~10.3%. Margins remained steady QoQ at 10.3%. Non-interest income grew 3.5% YoY to | 230 crore. The bank realised | 263 crore from sale of PSL...

Bandhan Bank reported a strong quarter in 2QFY19, with net profit at INR 4.88bn (+47% YoY, 10% above JMFe). Gross AUM growth was robust (+51% YoY), while disbursement growth was at 71% YoY. Gross NPLs were largely stable at 1.3%, while total provisions were slightly elevated at 1.1%, despite marginal reduction in PCR (330bps decline QoQ to 47%). Bandhan disclosed that it has an exposure of INR 3.9bn to the IL&FS; group (1.2% of AUM), which is currently classified as standard. Bank believes that the withdrawal of general permission to open branches by the RBI, does not materially impact balance sheet growth in the near term : a) Bandhan averages c. INR 350mn deposit per branch (vs 1.7bn , 1.4bn for...

As per the licensing condition for Bandhan Bank, shareholding of Non Operative Financial Holding Company (NOFHC) was to be brought down to 40% within three years from August 2015. However, the NOFHC was unable to adhere to the condition and currently holds ~82% in the bank. In a communication to the bank, the RBI has said the general permission to open new branches stands withdrawn while new branches could be opened with RBI approval. In addition, the regulator has mandated to freeze the remuneration of the MD & CEO at the existing level (| 2.4 crore...

ICICI Securities Ltd | Retail Equity Research Bandhan started as Bandhan Konnagar, a non-governmental organisation (NGO) in 2001 providing microfinance services to socially and economically disadvantaged women in rural West Bengal. On April 9, 2014, RBI granted an in-principle approval to Bandhan Financial Services (BFSL) to set up a scheduled commercial bank. Bandhan Bank has demonstrated stellar advances growth at ~51% CAGR in the last five years despite AP crisis and demonetisation. Continued focus on...

report strong profitability net profits to grow at a CAGR of 39% over FY18-21E. Return profile is also estimated to be robust ROE/ROA 19%/3.7 over the next 2 yrs. Although valuations looks expensive (trading at 6.8x FY19E and 5.2x FY20E...