Macquarie has maintained its Outperform rating on Bandhan Bank with a target price of ₹210, indicating a 13% upside from the current market price of ₹185.40. While the bank’s Q1FY26 performance saw a profit miss, the brokerage remains constructive on the stock’s medium-term potential.
The profit miss was primarily driven by elevated credit costs, stemming from higher slippages and increased write-offs. Though this was partly offset by higher other income, it wasn’t sufficient to meet expectations.
Macquarie also flagged that net interest margins (NIM) are expected to remain under pressure in the near term. This reflects the combined effect of the bank’s shift toward secured lending segments, ongoing stress in the microfinance (MFI) portfolio, and a slightly elongated credit cycle.
As a result of these headwinds, Macquarie sees a downside risk to its FY26E return on assets (RoA) projection of 1.5%. However, the Outperform rating is supported by reasonable valuations and the expectation that the credit environment will gradually normalize, improving profitability metrics in subsequent quarters.
Disclaimer: The brokerage view is based on publicly available research and does not constitute investment advice. Please consult a certified financial advisor before making any investment decisions.
