Shares of Bandhan Bank Ltd soared 10 per cent in Wednesday's trade, as the private lender reported better-than-expected earnings for the March quarter, driven by lower provisioning. The lender reported a beat on profit after tax and its net interest margin (NIM) expanded sequentially, even as net interest income (NII) was in in line Street estimates. The management expects loan growth to remain healthy at 14-15 per cent, with advances likely to grow in line with or ahead of overall business growth. NIM stood at 6.2 per cent and is guided to expand further by 10-20 basis points over the next 2-3 quarters, aided by repricing of term deposits. This triggered a rally on Bandhan Bank shares today.

MOFSL on Bandhan Bank
MOFSL said Bandhan Bank reported a strong quarter, led by a 30 basis points QoQ expansion in NIMs and a strong improvement in credit costs to 2 per cent against 3.3 per cent in Q3. 
The brokerage said business momentum was robust, supported by the seasonally strong 4Q. "The bank has indicated an exit FY27 NIM guidance of 6.5 per cent on earning assets (6 per cent on total assets), while we conservatively factor in 6 per cent NIM on earning assets. On asset quality, we expect improving forward flows for both the industry and Bandhan, particularly in the MFI segment, which should lower credit costs to 1.9 per cent in FY27," it said while suggesting a revised target price of Rs 210. 

JM Financial on Bandhan Bank 
This brokerage said stress is easing for Bandhan Bank as recovery gained pace. This brokerage broadly maintained earnings per share (EPS) estimates and now value the stock at FY28 book value of 1.1 times  against 0.9 times earlier, yielding a revised target of Rs 200, up from Rs 160). The brokerage maintained its 'ADD' on the stock.

"Credit cost decreased meaningfully by 149bps QoQ to 1.9 per cent led by lower slippages and improving collections in the EEB portfolio. Gross/net slippages improved 100bps/95bps QoQ, whereas EEB slippages declined sharply," it said.

Nuvama on Bandhan Bank
Nuvama said challenges in the EEB portfolio have largely normalised with the growth outlook improving on the back of better NIM, lower credit costs along with healthy loan and deposit traction. It upgraded the stock to ‘HOLD’ with a revised target of Rs 190 from Rs 133 earlier. The Bandhan Bank stock currently trades at 1 time FY27E book value. 
"While slippages and credit costs have improved, further normalisation is still anticipated," it said.