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On Thursday, Jefferies analyst Prakhar Sharma reaffirmed a Buy rating on Bandhan Bank Ltd (NSE:BANH). (BANDHAN:IN), with a price target set at INR195.00. Sharma’s commentary followed a roadshow in Singapore and Hong Kong, where Bandhan Bank’s management, including the CEO, Executive Directors, CFO, and Investor Relations, presented their insights and future outlook.
The management of Bandhan Bank indicated a cautious approach towards the asset quality trends, especially with the implementation of tighter lending caps starting from April. Despite these regulatory changes, the bank has a relatively low proportion of leveraged borrowers, which positions it favorably in terms of risk.
Looking ahead, the bank’s management anticipates a decrease in credit costs starting from the second half of the financial year 2026. Moreover, they expect the Return on Assets (ROA) for the fiscal year 2026 to remain stable year-over-year. In a longer-term perspective, over the next two to three years, the share of Microfinance Institution (MFI) loans in the bank’s portfolio is projected to drop from around 40% to 35%. This shift, coupled with lower credit costs and operational leverage, is expected to increase the bank’s ROA to between 1.8% and 1.9% by fiscal year 2028.
Sharma concluded that the valuation of Bandhan Bank’s shares is reasonable, reaffirming the Buy recommendation. The management’s strategy and the bank’s financial projections provide a positive outlook for the institution’s performance in the upcoming years.
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