Motilal Oswal Upgrades Bandhan Bank to Buy, Targets Rs 210

Bandhan Bank Posts Strong Q4FY26 Results

Bandhan Bank reported a significant increase in its profit after tax (PAT) for the fourth quarter (4QFY26), with a PAT of INR5.3 billion, representing a year-over-year (YoY) growth of 68% and beating market expectations by 32%.

The bank's net interest income (NII) grew by 4% quarter-over-quarter (QoQ) to INR27.9 billion, aligning with market expectations. The net interest margin (NIM) improved by 30 basis points (bp) QoQ to 6.2%, driven by a reduction in the cost of funds (CoF), which fell by 20bp QoQ, and an improvement in yields, which increased by 10bp QoQ.

Bandhan Bank's net advances grew by 13.7% YoY, with a quarterly growth rate of 6.4%. The bank's deposits also experienced growth, increasing by 10% YoY and 6.1% QoQ. The credit-deposit (CD) ratio of the bank marginally increased to 90%.

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Upgraded Earnings Estimates and Maintain BUY Recommendation

In light of the bank's improving growth visibility and lower credit costs, Motilal Oswal had previously upgraded Bandhan Bank in 3QFY26. Following the strong Q4FY26 results, the research firm has upgraded its earnings estimates for the bank by 4-5% for FY27 and FY28. The bank is expected to deliver a return on assets (RoA) of 1.3% in FY27 and 1.5% in FY28, compared to 0.6% in FY26.

Motilal Oswal maintains a BUY recommendation for Bandhan Bank with a revised target price of INR210, which is 1.2 times the estimated adjusted book value (ABV) for September 2027.

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