ICICI Direct recommended hold rating on Bandhan Bank with a target price of Rs 400 in its research report dated July 16, 2020.
ICICI Direct's research report on Bandhan Bank
Bandhan Bank reported a reasonable performance. Moratorium improved from 71% in April to 24% as of July 3, 2020 with micro finance portfolio down from 100% in April 2020 to 30%. Mortgage book witnessed marginal increase in moratorium at 15%; up 200 bps. MSME portfolio saw an improvement at ~18% of advances under moratorium (35% in April 2020) and NBFC-MFI revived to zero moratorium vs. ~59% in Q4FY20.
Outlook
Accordingly, we revise our target price to Rs 400 per share, valuing the stock at ~15.8x FY22E EPS (3.1x FY22E BV). With the recent upswing in stock price, we downgrade our rating to HOLD.
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