Bandhan Bank’s share price surged by 10% today, driven by strong financial performance in its Q2 FY25 results. The bank reported a substantial 30% increase in net profit, rising to ₹937 crore from ₹721 crore in the same quarter last year. This growth was largely supported by a 21% rise in net interest income (NII), which reached ₹2,948 crore, alongside an expansion in the bank’s net interest margin, which improved to 7.4% from 7.2%.
Here are the key factors behind today’s surge:
- Strong Profit Growth: The 30% year-on-year increase in net profit reflects the bank’s solid financial footing, despite some concerns over asset quality.
- Rising NII and Margins: Bandhan Bank’s NII grew by 21% YoY, driven by strong interest earned on advances and bills, signaling improving profitability.
- Positive Brokerage Outlook: CLSA reiterated its Outperform rating on Bandhan Bank, with a target price of ₹240, which represents a potential upside of 41.8% from the current price of ₹169.20, further boosting investor confidence.
- Total Income Growth: The bank’s total income for Q2 FY25 rose to ₹6,094.53 crore from ₹5,032.19 crore, further cementing investor optimism.
However, concerns remain over the bank’s asset quality. Gross NPA rose to 4.68% from 4.23% (QoQ), and Net NPA increased to 1.29% from 1.15% (QoQ), which may raise questions about risk management in the coming quarters. Despite these concerns, the bank’s strong earnings and brokerage confidence have contributed to the positive market response today.
