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Bandhan Bank shares rose 5% in early trade on Friday after global brokerage firm CLSA upgraded the stock to a ‘high-conviction outperform’; Check target price
Bandhan Bank Share Price
Bandhan Bank shares rose 5% in early trade on Friday after global brokerage firm CLSA upgraded the stock to a ‘high-conviction outperform’, predicting a massive 61% upside potential.
CLSA pegged a price target of Rs 220 for the stock, largely backed by the lender’s outperformance over peers in the current MFI (Micro Finance Institution) cycle. The MFI sector has been grappling with persistent challenges and obstacles over the past five-six months, resulting in a notable deterioration in asset quality.
Going foreward, CLSA believes the Indian microfinance space will go from bad to less bad in a couple of quarters and from less bad to normal by Q2 FY26. In such a backdrop, CLSA sees Bandhan Bank as a play on the MFI recovery cycle, driven by its gradual migration to secured loans.
CLSA noted early signs of improvement in collection efficiency at Bandhan Bank, positioning the bank well to capitalize on these developments. The brokerage also highlighted that Bandhan Bank’s asset quality is stronger compared to its peers and, with a completely new management team in place, it does not foresee the risk of “kitchen-sinking.”
Following a 20% correction in the past three months, CLSA has upgraded its rating on Bandhan Bank. The bank is expected to deliver a Return on Assets (RoA) of 1.5% to 1.6% over the medium term, comparable to Axis Bank, according to CLSA’s report.
Out of 28 analysts covering Bandhan Bank, 15 have a “buy” rating, 8 recommend “hold,” and 5 suggest “sell.”
Bandhan Bank’s shares are currently trading up 3% at Rs 140.55, though the stock remains down 81% from its 2018 high of Rs 741.
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