The analyst cited a potential technical reversal and noted the bank’s shift toward secured lending and digital growth as key positives.
Bandhan Bank’s financial performance in the first quarter (Q1) remained under pressure, though a pivot in lending strategy and improving technical structure point to potential recovery.
At the time of writing, Bandhan Bank shares fell over 2% on Monday.
The bank reported a mixed quarter, with net interest income remaining flat at ₹2,757 crore, a decline of nearly 8% from the same period last year.
Operating profit saw a modest 6% rise over the previous quarter, reaching ₹1,668 crore, but was still down 14% year-on-year. Profit after tax improved to ₹372 crore — a 17% gain from the last quarter, though it’s a steep drop from the ₹1,069 crore reported a year ago.
While advances declined by 2.5% to ₹1.34 lakh crore, deposits increased by 2.3%, reaching ₹1.55 lakh crore. Net interest margin fell to 6.4% from 6.67% in the previous quarter.
The current account savings account (CASA) ratio dropped to 27.1% from 31.4%. Credit cost improved slightly to 3.5% from 3.9%, while the provision coverage ratio remained strong at 87.3%, including write-offs.
Secured lending formed 52.1% of the total loan book, up from 43% in the previous year.
SEBI-registered analyst Rajneesh Sharma highlighted the bank’s shift, as stated by Managing Director and Chief Executive Officer Partha Pratim Sengupta, who noted that Bandhan Bank is reducing its focus on the Emerging Entrepreneurs Business (EEB) portfolio and expanding into secured retail and wholesale segments to drive more stable growth.
Retail lending (excluding housing) increased 78% year-on-year, while wholesale banking grew 32%.
The EEB portfolio now accounts for 39.5% of total loans, compared to nearly 50% a year ago. Sharma also flagged that 98% of retail transactions and 92% of new savings accounts were handled digitally during the quarter.
From a technical perspective, Sharma observed a bullish Relative Strength Index (RSI) divergence, where RSI rose even as prices hit lower lows in late 2024.
He said the stock broke out of a three-year downward trendline, with the current price near ₹187 sustaining above the breakout level.
Immediate resistance lies at ₹212.82, while strong support is placed at ₹137.79. Sharma added that holding above ₹175 could pave the way for further upside.
He also noted that retail term deposits rose 34% year-on-year, reflecting depositor confidence, and the bank continued diversifying geographically, with 61.8% of loans now from outside eastern India.
Additionally, Sharma said the latest disbursements under the EEB portfolio in Q1 showed no signs of stress, with zero special mention accounts or non-performing assets reported.
On Stocktwits, retail sentiment was ‘bullish’ amid ‘high’ message volume.
Bandhan Bank’s stock has risen 12.6% so far in 2025.
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