ICICI Direct is bullish on Bandhan Bank has recommended buy rating on the stock with a target price of Rs 650 in its research report dated October 01, 2018.
ICICI Direct's research report on Bandhan Bank
As per the licensing condition for Bandhan Bank, shareholding of Non Operative Financial Holding Company (NOFHC) was to be brought down to 40% within three years from August 2015. However, the NOFHC was unable to adhere to the condition and currently holds ~82% in the bank. In a communication to the bank, the RBI has said the general permission to open new branches stands withdrawn while new branches could be opened with RBI approval. In addition, the regulator has mandated to freeze the remuneration of the MD & CEO at the existing level (Rs 2.4 crore as of FY18 annual report), till further notice.
Outlook
We maintain BUY rating on the stock. Robust growth, better than banking margins and low cost to income still continue to remain strong attributes of the bank.
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