Bandhan Bank
Bandhan Bank
Banks F&OKey Fundamentals
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Key Insights
Strengths
2- Stock is trading at 1.11 times its book value
- Company's working capital requirements have reduced from 71.8 days to 38.5 days
Weaknesses
6- Company has low interest coverage ratio.
- Promoter holding has decreased over last quarter: -1.44%
- The company has delivered a poor sales growth of 11.6% over past five years.
- Company has a low return on equity of 9.01% over last 3 years.
- Contingent liabilities of Rs.28,896 Cr.
- Dividend payout has been low at 13.1% of profits over last 3 years
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 2d agoBandhan Bank trades at a market cap of ₹27,914 Cr with a P/B of 1.11x and P/E of 20.7x. Profitability has been under pressure with TTM profit declining 34% and 3-year ROE averaging just 9%, while the bank's historical high-growth phase (10-year sales CAGR of 30%) has decelerated sharply to near-zero TTM revenue growth.
- Stock trades at just 1.10x book value, well below the historical average for listed private banks, suggesting limited downside from an asset-backing perspective
- Working capital cycle has improved significantly from 71.8 days to 38.5 days, indicating better operational efficiency and liquidity management
- 10-year compounded sales growth of 30% demonstrates a strong long-term franchise-building track record in underbanked microfinance segments
- P/E of 20.7x is modest for a bank with a microfinance-led niche, leaving room for re-rating if profitability normalises
- Dividend yield of 0.86% provides some income cushion, and the low 13.1% payout ratio leaves room for future dividend increases if earnings recover
- 5-year compounded sales growth of 12% shows the core lending franchise continues to scale despite asset quality headwinds
- 10-year compounded profit growth of 16% indicates the bank has historically been able to generate earnings growth through credit cycles over longer horizons
- TTM compounded profit has declined 34%, signalling a sharp deterioration in earnings momentum
- 3-year compounded profit growth is -18%, indicating sustained earnings erosion rather than a one-off event
- 3-year average ROE of just 9% and last-year ROE of only 5% are well below the cost of equity for a bank with this risk profile
- Low interest coverage ratio raises concerns about the bank's ability to service obligations comfortably under stress scenarios
- Contingent liabilities stand at ₹28,896 Cr, a material figure relative to the ₹27,914 Cr market cap, posing potential off-balance-sheet risk
- Promoter holding decreased by 1.44% in the last quarter, which may signal reduced insider confidence or regulatory-driven dilution
- Stock price CAGR of -9% over both 3-year and 5-year periods reflects persistent value destruction for shareholders
- TTM revenue growth has flatlined at 0%, suggesting the bank is struggling to grow its topline in the current environment
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 2h ago- Credit card unsecured lending risk Sep 8
Unsecured credit cards carry 125-150% risk weight vs 35-50% for housing loans. Industry data shows unsecured lending accounted for 51.9% of new NPAs in retail portfolios in H1FY25, with Year 1 net profit impact estimated at -₹120 to -₹180 crore.
- Near-term NIM moderation expected Sep 1
Goldman Sachs maintains Neutral rating with ₹180 target price, noting NIMs are expected to moderate over time. Medium-term RoA guided at only 1.2-1.4%, below the bank's FY27 target of 1.6-1.8%.
- New-to-credit Gen Z segment risk Sep 8
The Sparks card targets Gen Z and new-to-credit customers with limited credit history. Aggressive expansion scenarios could push credit card GNPA to 4.5-6.0% vs current bank-wide GNPA of 3.1%.
- Credit card launch drives diversification Sep 8
Bandhan Bank launched four credit card variants (Sparks, Ignite, Flare, Lumina) with Mastercard, entering a market growing at 20% CAGR with only 3% population penetration. The move targets fee income diversification and could drive P/B re-rating from 1.05-1.10x toward 1.35-1.50x over 18-24 months.
- Strong distribution for cross-selling Sep 8
The bank's 31.8 million customers across 6,388 banking outlets provide a ready cross-selling base. Digital acquisition costs are 65-70% lower than traditional channels, and the credit card business is expected to contribute +₹140 to +₹290 crore net profit by Year 3.
- Strong Crisil ESG rating of 69 Sep 7
Bandhan Bank received a 'Strong' ESG rating of 69 with a Core ESG score of 73 for FY26 from Crisil, highlighting solid sustainability performance based on public disclosures.
- Secured portfolio mix improving Sep 8
Secured portfolio share grew from 50.5% in Q4 FY25 to 57% in Q1 FY27, with management targeting 58% secured and 42% unsecured by FY27 exit. CRAR stands at a healthy 18.2%.
- UBS and Goldman Sachs conferences Sep 8
Bandhan Bank participating in UBS India Summit 2026 on Sep 11 in Mumbai and attended Goldman Sachs Asia Leaders Conference on Sep 1 in Hong Kong. Investor presentation available online.
- 1.05 crore ESOPs granted Sep 5
Board approved 1,04,87,996 ESOPs at ₹164.95 per option under Series 1, vesting equally over four years to align employee incentives with long-term performance.
- Board reappointments and appointments Sep 5
ED Rajinder Kumar Babbar reappointed for three years. Nitin Arora appointed as Chief of Internal Vigilance and interim audit roles extended.
- AGM: all 7 resolutions passed Aug 24
Shareholders approved all seven resolutions at the 12th AGM on Aug 24, including appointment of Debasish Panda as Chairman and adoption of FY26 financials.
- Adequate ESG score of 58 Aug 31
Received an ESG score of 58 categorized as 'Adequate' from ESG Risk Assessments and Insights Limited, a notably lower rating than the Crisil score of 69.
TL;DR: Bandhan Bank is executing a clear universal bank transformation, with its credit card launch marking a strategic milestone toward fee income diversification and a more balanced loan book (secured now at 57%). Key risks center on unsecured lending asset quality and near-term profitability drag of ₹120-180 crore from credit card investments, while Goldman Sachs' Neutral stance and ₹180 TP reflect caution on NIM moderation. The trajectory is improving structurally, but the next 12-18 months will test whether the bank can scale credit cards without compromising its 3.1% GNPA and 1.6-1.7% credit cost targets.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 4,523 | 4,492 | 4,665 | 5,189 | 5,536 | 5,500 | 5,479 | 5,434 | 5,476 | 5,354 | 5,431 | 5,428 | 5,631 |
| Expenses | 1,916 | 2,036 | 2,099 | 3,496 | 2,115 | 2,294 | 3,281 | 3,144 | 2,962 | 2,977 | 3,089 | 2,802 | 2,849 |
| Financing Profit | 575 | 407 | 426 | -637 | 890 | 640 | -466 | -388 | -204 | -389 | -401 | -7 | 72 |
| Fin. Margin % | 13% | 9% | 9% | -12% | 16% | 12% | -9% | -7% | -4% | -7% | -7% | 0% | 1% |
| Other Income | 385 | 540 | 545 | 701 | 528 | 609 | 1,112 | 700 | 726 | 546 | 691 | 771 | 604 |
| Interest | 2,032 | 2,049 | 2,140 | 2,330 | 2,531 | 2,566 | 2,664 | 2,678 | 2,718 | 2,765 | 2,743 | 2,633 | 2,710 |
| Depreciation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| PBT | 960 | 947 | 971 | 64 | 1,418 | 1,249 | 645 | 311 | 521 | 158 | 290 | 764 | 676 |
| Tax % | 25% | 24% | 25% | 15% | 25% | 25% | 34% | -2% | 29% | 29% | 29% | 30% | 26% |
| Net Profit | 721 | 721 | 733 | 55 | 1,063 | 937 | 426 | 318 | 372 | 112 | 206 | 534 | 502 |
| EPS in Rs | 4.48 | 4.48 | 4.55 | 0.34 | 6.6 | 5.82 | 2.65 | 1.97 | 2.31 | 0.69 | 1.28 | 3.32 | 3.11 |
| Gross NPA % | 6.76% | 7.32% | 7.02% | 3.84% | 4.23% | 4.68% | 4.68% | 4.71% | 4.96% | 5.02% | 3.33% | 3.27% | 3.15% |
| Net NPA % | 2.18% | 2.32% | 2.21% | 1.11% | 1.15% | 1.29% | 1.28% | 1.28% | 1.36% | 1.37% | 0.99% | 0.97% | 0.93% |
Profit & Loss
| Particulars | Mar 2015 4m | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 0 | 1,581 | 3,909 | 4,802 | 6,643 | 10,885 | 12,524 | 13,871 | 15,905 | 18,870 | 21,948 | 21,689 | 21,844 |
| Expenses | 6 | 633 | 1,044 | 1,597 | 2,467 | 3,739 | 6,534 | 11,298 | 8,693 | 9,310 | 10,555 | 11,526 | 11,717 |
| Financing Profit | -6 | 299 | 1,360 | 1,436 | 2,028 | 2,584 | 1,029 | -2,584 | 567 | 1,009 | 936 | -696 | -724 |
| Fin. Margin % | — | 19% | 35% | 30% | 31% | 24% | 8% | -19% | 4% | 5% | 4% | -3% | -3% |
| Other Income | 8 | 150 | 411 | 706 | 1,063 | 1,549 | 2,022 | 2,823 | 2,469 | 2,171 | 2,967 | 2,734 | 2,612 |
| Interest | 0 | 649 | 1,505 | 1,770 | 2,148 | 4,562 | 4,961 | 5,157 | 6,645 | 8,551 | 10,458 | 10,859 | 10,851 |
| Depreciation | 0 | 36 | 67 | 86 | 78 | 80 | 103 | 110 | 143 | 238 | 279 | 304 | 0 |
| PBT | 2 | 414 | 1,704 | 2,056 | 3,013 | 4,053 | 2,949 | 129 | 2,893 | 2,943 | 3,623 | 1,734 | 1,888 |
| Tax % | 75% | 33% | 35% | 35% | 35% | 25% | 25% | 2% | 24% | 24% | 24% | 29% | — |
| Net Profit | 1 | 275 | 1,112 | 1,346 | 1,952 | 3,024 | 2,205 | 126 | 2,195 | 2,230 | 2,745 | 1,224 | 1,353 |
| EPS in Rs | 0.01 | 2.51 | 10.15 | 11.28 | 16.36 | 18.78 | 13.69 | 0.78 | 13.62 | 13.84 | 17.04 | 7.6 | 8.4 |
| Div. Payout % | 0% | 0% | 0% | 9% | 18% | 0% | 7% | 0% | 11% | 11% | 9% | 20% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 501 | 1,095 | 1,095 | 1,193 | 1,193 | 1,610 | 1,611 | 1,611 | 1,611 | 1,611 | 1,611 | 1,611 |
| Reserves | 1 | 2,239 | 3,351 | 8,189 | 10,009 | 13,585 | 15,798 | 15,770 | 17,973 | 19,999 | 22,994 | 23,964 |
| Borrowing | 0 | 3,052 | 1,029 | 285 | 521 | 16,379 | 16,960 | 19,921 | 24,711 | 16,372 | 11,138 | 14,303 |
| Deposits | — | 12,089 | 23,229 | 33,869 | 43,232 | 57,082 | 77,972 | 96,331 | 1,08,065 | 1,35,202 | 1,51,212 | 1,66,344 |
| Other Liabilities | 25 | 1,282 | 1,532 | 774 | 1,487 | 3,062 | 2,675 | 5,234 | 3,677 | 4,659 | 4,520 | 4,902 |
| Total Liabilities | 527 | 19,756 | 30,236 | 44,310 | 56,442 | 91,718 | 1,15,016 | 1,38,867 | 1,56,037 | 1,77,842 | 1,91,476 | 2,11,124 |
| Fixed Assets | 0 | 237 | 252 | 238 | 222 | 347 | 432 | 415 | 509 | 959 | 855 | 931 |
| CWIP | 108 | 0 | 0 | 0 | 109 | 22 | 55 | 173 | 346 | 214 | 325 | 470 |
| Investments | 0 | 3,758 | 5,516 | 8,372 | 10,037 | 15,352 | 25,155 | 29,079 | 32,366 | 29,288 | 40,712 | 38,668 |
| Other Assets | 418 | 15,761 | 24,468 | 35,700 | 46,073 | 75,997 | 89,374 | 1,09,200 | 1,22,817 | 1,47,381 | 1,49,584 | 1,71,054 |
| Total Assets | 527 | 19,756 | 30,236 | 44,310 | 56,442 | 91,718 | 1,15,016 | 1,38,867 | 1,56,037 | 1,77,842 | 1,91,476 | 2,11,124 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | — | — | 8,885 | -2,599 | 2,695 | 6,583 | -909 | 902 | -4,245 | 14,808 | 2,752 | 1,143 |
| Investing | — | — | -2,671 | -2,237 | -2,373 | -4,187 | -1,804 | -612 | -1,618 | 1,691 | -3,879 | 317 |
| Financing | — | — | -2,023 | 2,846 | 105 | 154 | 588 | 2,803 | 4,791 | -8,579 | -5,475 | 2,923 |
| Net Cash Flow | — | — | 4,192 | -1,989 | 427 | 2,550 | -2,125 | 3,093 | -1,071 | 7,921 | -6,601 | 4,382 |
| Free Cash Flow | — | — | 8,803 | -2,671 | 2,524 | 6,481 | -1,129 | 691 | -4,654 | 14,252 | 2,466 | 616 |
| CFO/OP | — | — | 330 | -56 | 91 | 108 | 3 | 62 | -49 | 167 | 29 | 18 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE % | 0% | 14% | 29% | 19% | 19% | 23% | 14% | 1% | 12% | 11% | 12% | 5% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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Company Information
Incorporated in 2014, Bandhan Bank is a commercial bank focused on serving underbanked and underpenetrated markets in India. The company has a PAN-India presence and offers a wide range of banking products & services and asset & liability products and services designed for micro banking and general banking. [1][2]
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