Bandhan Bank shares fell 7 percent to ₹158.58 on the National Stock Exchange (NSE) during Friday afternoon trading, continuing a downward trend following an 88 percent year-on-year decline in net profit to ₹112 crore for the September quarter. This figure missed analyst projections by over 60 percent.
Axis Securities downgraded its target price for the bank to ₹165 from ₹195, while maintaining a ‘Hold’ rating. The brokerage cited ongoing deterioration in asset quality within the bank’s microfinance portfolio. Furthermore, earnings estimates have been cut by 49 percent for FY26, and easing stress in the bank’s Emerging Entrepreneurs Business (EEB) segment is now anticipated to be delayed by an additional two months. Gross slippages in the EEB segment remained high on a quarter-on-quarter basis.
JM Financial has also revised its rating to ‘Reduce,’ setting a target of ₹165. The firm noted that stress has extended beyond the microfinance sector, with gross non-performing assets (NPAs) in the non-MFI portfolio experiencing an 11 percent sequential increase. Concerns were raised about a 55 percent rise in early-stage delinquencies (SMA-0) to ₹15.8 billion, although ₹6.5 billion of that figure was attributed to seasonal holiday effects.
The bank reported a net interest income of ₹2,589 crore, falling short of the estimated ₹2,643 crore, as margin compression led to a decrease of 55 basis points to 5.8 percent. The gross NPA ratio remained stable at 5 percent, while provisions surged more than double year-on-year to ₹1,153 crore. Management forecasts that credit costs are expected to normalize to between 1.5 and 1.6 percent by FY27, contingent upon enhancements in collection efficiency within its microfinance operations.
Published on October 31, 2025.
