Bandhan Bank has been a topic of interest among analysts following recent developments, including the appointment of a new MD & CEO and the resolution of a significant claim under the Credit Guarantee Fund for Micro Units (CGFMU). These moves have addressed some of the bank’s key overhangs, resulting in mixed to positive reviews from various brokerage firms. Here’s what major brokerages are targeting for Bandhan Bank’s stock:
Brokerage Firm Recommendations for Bandhan Bank
Upside/Downside pricing calculating from CMP 187.90 at 8AM on Oct 11, 2024
| Brokerage Firm | Rating | Target Price (₹) | Upside/Downside % | Key Insights |
|---|---|---|---|---|
| Jefferies | Buy | 240 | +27.7% | New MD & CEO appointment seen as a positive, with past stress clearing up. Bandhan is expected to benefit from CGFMU claim and recoveries that add to its profit pool. |
| Goldman Sachs | Positive | N/A | N/A | MD & CEO appointment and CGFMU claim resolution remove near-term overhang, with the focus now shifting to the bank’s fundamentals and reducing investor uncertainty. |
| CLSA | Positive | N/A | N/A | Key overhangs have cleared, and the focus is back on fundamentals. Benign near-term delinquency outlook for MFI segment; expect a rerating of the stock. |
Key Takeaways:
- Jefferies has maintained a “Buy” rating on Bandhan Bank with a target price of ₹240, implying a 27.7% upside from the current price. The firm believes that the appointment of Partha Sengupta as MD & CEO, along with the CGFMU claim of ₹3.1 billion and the ₹2.3 billion recovery, adds credibility to the bank and strengthens its profit pool. With attractive valuations and past stress resolved, Jefferies remains bullish on the stock.
- Goldman Sachs has given a positive outlook, stating that the new MD & CEO appointment and CGFMU claim resolution remove the near-term overhang that was affecting the bank. The firm believes the focus will now turn to fundamentals, with reduced investor uncertainty around business momentum post-management change.
- CLSA also offered a positive view, highlighting that the key overhangs for Bandhan Bank are gone, allowing the focus to return to its fundamentals. The near-term delinquency outlook for the microfinance institution (MFI) segment remains benign, and CLSA expects today’s developments to lead to a rerating of the stock.
Conclusion:
Brokerages are largely optimistic about Bandhan Bank’s future, with key developments like the new leadership and resolution of claims easing previous concerns. Jefferies has provided a clear upside target, while other firms like Goldman Sachs and CLSA have focused on the improved outlook for the bank’s fundamentals and future growth potential.
Disclaimer: We are not SEBI Registered Research Analysts. This article is based on reports by brokerage firms and does not reflect our stance on the company stock. The information provided is for informational purposes only and should not be construed as investment advice. Readers are advised to consult with a qualified financial advisor before making any investment decisions. The publication and the author hold no responsibility for any investment losses incurred based on the information provided.
