JPM on Bandhan BK
Neutral, TP Rs 175
Guidance cut was key focus in Bandhan’s 1QFY27 earnings call with a significant cut in FY27 RoA and growth targets.
Bandhan has cut 4QFY27 RoA guidance by 40bps to 1.2-1.4% (vs 1.6-1.8% earlier) driven primarily by external factors:
(i) 30bps RoA impact from moderation in NIM outlook (from 6.5% to 1Q level of 6.2%) on account of tighter liquidity and elevated funding costs, and
(ii) 10bps RoA impact from elevated opex especially rising technology related costs (from 4.2% to 1Q level of 4.3%).
Also, FY27 loan growth guidance was cut to lower end of the 14-15% range guided earlier with a conscious growth slowdown owing to rising AQ risk from higher energy costs and supply chain disruptions as well as uncertain monsoons.
Nomura on Bandhan BK
Neutral, TP Rs 190
1QFY27 PAT of INR5bn (+35% y-y, -6% q-q) beat estimate by 8%, driven by strong NII, fee income and lower credit costs.
The real story, though, is management cutting FY27F RoA guidance to 1.2-1.4% (from 1.6-1.8%), citing cost-offunds pressure & rising tech opex tied to external environment
Of 40bp cut, 30bp reflects NIM expansion that management had earlier expected over the coming quarters but no longer sees playing out, & 10bp reflects higher tech-related opex
Bank raised average SA rates by 20bp and peak TD rates by 20bp towards the end of 1Q, on intense deposit competition, so cost impact will flow through over coming quarters
This comes as a surprise given had expected funding costs to ease on RBI’s supportive measures.
Asset quality held up: credit costs at 1.8% (down slightly q-q), though gross slippages ticked up to 2.9% (vs 2.8% in 4QFY26)
Cut FY27-28F EPS by 4-7%, building in 18-24bp lower NIMs even after lowering credit cost assumptions to 1.8% (from 2%).
CLSA on Bandhan Bk
O-P, TP Rs 235
A decent quarter but a cautious management outlook
Reported PAT of Rs5bn vs estimate of Rs5.3bn.
While NII beat estimate by 4%, lower treasury gains and higher Opex led to a PAT miss.
Gross loan growth optically accelerated to 16% due to a low YoY base.
Reported NIM was stable at 6.2% QoQ.
Asset quality was strong with the net slippage ratio declining 20bps QoQ to 1.7% (last delivered in 1QFY25).
Management cut its FY27 exit ROA target from 1.6%-1.8% earlier to 1.2%-1.4% now citing higher funding costs & a challenging external environment
While this may spook street, our estimate was lower anyway (FY28 ROA of 1.3%).
Jefferies on Bandhan Bk
Buy TP Rs 240
Q1 profit of Rs5bn (up 35% YoY on low base) was ahead of est with better loan growth, fees & MFI asset quality.
Still, mgt lowered exit FY27 ROA guidance to factor higher funding cost (due to tight liquidity) & opex.
While est. were below guidance & see benefits from FCNR-B inflows (not in guidance), cut estimates by +10%.
Vals at 1.2x FY27 adj PB can cushion downsides
Macquarie on Bandhan Bank
Recommendation — Underperform; Target ₹130
Uncertain road to recovery
PAT misses estimates
Margin outlook cut; credit costs remain elevated
Margin outlook cut; credit costs remain elevated
