CLSA has reiterated its high conviction outperform rating on Bandhan Bank with a target price of ₹220 following management commentary at an investor conference. The bank projected overall loan growth in the low teens for FY26, with mid-single-digit growth for its microfinance (MFI) segment.
Management acknowledged that MFI asset quality recovery has been slower than expected but said improvements should emerge in the second half of FY26. It also highlighted some near-term pressure on yields from the lagged impact of June repo cuts. However, the bank expects this to be partly offset by savings account rate cuts, a reduction in wholesale deposit share, and a higher CASA ratio over the longer term.
CLSA said while asset quality concerns persist in the near term, Bandhan Bank’s growth outlook and management’s focus on balancing margins and funding costs provide confidence. It continues to view the stock as an attractive high-conviction idea in the financials space.
Disclaimer: The views and recommendations made in this article are those of CLSA. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
