Shares of Bandhan Bank were trading nearly 3% higher on Friday, January 23, emerging among the top gainers on the NSE, after brokerage firm Motilal Oswal upgraded the stock following the bank’s largely in-line Q3 FY26 performance.
In early trade, Bandhan Bank shares were quoted around Rs 146.71, up 2.98%, as investors reacted to the brokerage upgrade and improved outlook on the bank’s operating metrics.
Motilal Oswal upgraded Bandhan Bank to ‘Buy’ from ‘Neutral’ and raised its price target to Rs 175 per share, implying an upside of about 22% from Thursday’s closing price. The brokerage noted that the bank has come out of a prolonged non-performing asset (NPA) cycle that had weighed on growth and profitability over the past few years, resulting in an average return on equity of around 8% over the last five years.
The brokerage highlighted that asset quality has begun to stabilise and margins are normalising, which could support an improvement in operating performance in the coming quarters. Motilal Oswal expects Bandhan Bank to deliver a return on assets of 1.3% to 1.5% in FY27–FY28, compared with 0.6% estimated for FY26.
Motilal Oswal had downgraded the stock to ‘Neutral’ in January 2021, citing stress in asset quality at the time. After nearly five years of valuation de-rating, the brokerage now believes that current valuations appear reasonable, even as it remains watchful of potential risks related to the upcoming West Bengal elections.
Among other brokerages, CLSA maintained an ‘Outperform’ rating on Bandhan Bank with a price target of Rs 190, citing a decent December quarter performance.
The brokerage upgrade and expectations of improving profitability appear to have driven the stock’s gains during Friday’s session.
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