Jefferies has maintained a Buy rating on Bandhan Bank, setting a target price of ₹195, suggesting a potential upside of around 16% from its current market price of ₹168.73. The brokerage shared key takeaways from a recent management interaction that underscores cautious optimism.
The bank’s management remains vigilant about asset quality trends, especially in light of tightened lending caps from April, although its exposure to leveraged borrowers is relatively low. Jefferies notes that credit costs are expected to moderate from the second half of FY26, and the return on assets (ROA) for FY26 is likely to remain stable year-on-year.
Over the next two to three years, Bandhan Bank aims to reduce the share of microfinance institution (MFI) loans from around 40% to 35%. This shift, coupled with lower credit costs and improved operating leverage, could help lift the ROA to 1.8%–1.9% by FY28, Jefferies said.
Disclaimer: The views expressed are those of Jefferies and do not constitute investment advice or a recommendation by Business Upturn.
