Bandhan Bank shares fall after Q1 profit rise but RoA guidance cut

Mumbai: Bandhan Bank shares fell sharply on Wednesday after the private lender reduced its return on assets guidance, even though its quarterly profit exceeded expectations.According to the latest market data available at 12:22 pm, the stock was trading at Rs 173.50, down Rs 35.33 or 16.92 percent. It opened at Rs 187.95 and moved between an intraday high of Rs 192.22 and a low of Rs 169.56.Guidance ReducedThe Kolkata-based lender now expects its RoA to average 1.2-1.4 percent by the end of FY27. This is 40 basis points below its earlier guidance of 1.6-1.8 percent.The bank said narrower net interest margins and higher operating expenses could weigh on returns. Rising funding costs and increased technology-related spending have also affected its outlook.Managing Director and CEO Partha Pratim Sengupta said the bank’s medium-term strategic objective remains unchanged. However, the external environment could affect how quickly it reaches its targeted RoA level.RoA MovementBandhan Bank’s RoA stood at 1 percent at the end of June. It improved by 20 basis points from a year earlier but declined by 11 basis points compared with the previous quarter.Profit RisesThe bank reported a 35 percent year-on-year increase in net profit to Rs 502 crore for Q1 FY27, against Rs 372 crore in the same quarter last year.Bandhan Bank Stock Surges Over 12% After Strong Q4 ResultsNet interest income rose 5.9 percent to Rs 2,921 crore, while net total income increased 1.2 percent to Rs 3,524 crore.Loan GrowthGross advances increased 16.4 percent year-on-year to Rs 1,55,555 crore as of June 2026. The retail loan book, excluding housing, expanded 45 percent, while wholesale banking grew 38 percent. Housing loans rose 6 percent.Asset quality also improved. Gross non-performing assets declined by 182 basis points year-on-year, while net NPAs improved by 43 basis points.SENSEX Slides 792 Points Amid Broad Selloff, IndiGo, Bandhan Bank & Paytm Drive Stock ActionDespite the improvement in profit and asset quality, investors focused on the weaker profitability outlook. The revised guidance raised concerns that margin pressure and costs may limit earnings growth for the lender.The bank said it would continue focusing on customer-led, digitally enabled growth by strengthening distribution and expanding its range of products.Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult qualified financial advisers.

Shares of Bandhan Bank plunged nearly 15% to an intraday low of Rs 177.35 on Wednesday after the private lender reported its Q1 results and lowered its return on assets (RoA) guidance, citing an uncertain global macro environment and intensifying competition in deposit pricing.The bank, which announced its April–June quarter results after market hours on Tuesday, reported a 35% year-on-year (YoY) rise in net profit to Rs 502 crore for Q1 FY27, compared with Rs 372 crore in the year-ago period. The increase was primarily driven by a 41% YoY decline in provisions to Rs 683 crore during the quarter.Operating profit for Q1, however, declined nearly 19% YoY to Rs 1,358 crore, while net interest income (NII) increased nearly 6% YoY to Rs 2,920 crore. Net interest margin (NIM) fell 16 bps to 6.2%.Bandhan Bank’s asset quality improved, with gross non-performing assets ratio falling to 3.15% at the end June against 4.96% a year prior. "Higher staff expenses on account of the new labour cost and a 65% rise in tech cost following the West Asia crisis led to the surge in expenditure," managing director Partha Pratim Sengupta said. "The lower credit cost helped the bank book higher net profit," he said.Also Read | Bandhan Bank Q1 profit jumps 35% as provisions decline sharplyMotilal Oswal on Bandhan BankMotilal Oswal Financial Services downgraded the shares of Bandhan Bank to ‘Neutral’ with a target price of Rs 225 apiece, implying nearly 8% upside potential. The domestic brokerage said that the company’s net profit beat its estimate, driven by lower-than-expected provisioning.The NII growth of 6% was inline with expectation. RoA guidance of 1.6-1.8% by the exit of Q4 FY27 has been cut to 1.2%-1.4% on the back of uncertain global macros and higher competitive intensity in deposit pricing, a combination of which is expected to have an adverse impact of 30 bp on NIMs and 10 bp on opex, the brokerage highlighted.Motilal Oswal slashed Bandhan Bank’s earnings estimates for FY27 and FY28 by 14% and 6% respectively, and now expects the private lender to deliver an RoA of 1% in FY27 and 1.4% in FY28.Bandhan Bank share priceBandhan Bank shares had fallen over 4% in the week through Tuesday's close at Rs 208.83. Despite the recent decline, the stock is still up about 44% so far in 2026. Over the past year, it has gained nearly 15%, though it remains down 5% over three years and 32% over five years. The bank's market capitalisation stands at Rs 33,430 crore.Also Read | ICICI Bank wins analysts’ vote after Q1 show; HDFC Bank, Axis, Kotak & Yes Bank face scrutiny(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Bandhan Bank reported a 35% jump in Q1 profit on lower provisions. Jefferies and BofA remain bullish, while Macquarie stays cautious after lower RoA guidance.