Stock to buy today: Anand Rathi predicts 25% upside in Bandhan Bank shares after better-than-expected Q4 results

Bandhan Bank’s strong Q4 profit failed to impress investors, as the stock declined nearly 3 per cent in intraday trade on the BSE on Friday, May 2.

Bandhan Bank shares opened at ₹168.05, compared to the previous close of ₹165.65, and rose nearly 5 per cent to an intraday high of ₹173.35 before erasing all gains and falling almost 3 per cent to hit an intraday low of ₹161.10.

Around 1:50 PM, Bandhan Bank shares were trading 2.14 per cent lower at ₹162.10, while the benchmark Sensex was up 0.51 per cent at 80,649.

Bandhan Bank Q4 results

On April 30, Bandhan Bank reported a solid 483 per cent year-on-year (YoY) jump in its Q4FY25 net profit to ₹318 crore, compared with ₹55 crore posted at the end of the same quarter last year.

However, its net revenue dropped 30 per cent YoY to ₹3,456 crore for the quarter under review.

While the profit jumped, the bank's net interest income (NII) declined 4 per cent YoY to ₹2,756 crore in Q4 FY25. The net interest margin (NIM) for the quarter was 6.7 per cent, down 96 bps YoY.

The operating profit for Q4FY25 came at ₹1,571 crore, down 14.5 per cent compared to ₹1,838 crore in the corresponding quarter a year ago.

Bandhan Bank share price trend

Bandhan Bank's share price has been under pressure over the last year, falling nearly 12 per cent. However, it has witnessed healthy traction in the last two months. On a monthly scale, the stock rose over 13 per cent in April after a 3.5 per cent gain in March.

The banking stock hit a 52-week low of ₹128.15 on February 18 this year after hitting a 52-week high of ₹222.30 on July 30 last year.

Anand Rathi sees a 25% upside

Brokerage firm Anand Rathi Share and Stock Brokers maintained a buy call on the stock, pegging the target price at ₹207, implying a 25 per cent upside potential.

"Q4 was better than expected for Bandhan Bank, given the challenges the MFI segment faced. Though slippages were higher than in the prior quarter in the overall book, including the EEB book, the decrease in the SMA book was positive, indicating lower incremental stress build-up," said Anand Rathi.

The brokerage firm pointed out that, given that the bank has been recognising stress in its EEB book for 17 quarters now, further stress may be lower than that in the industry.

"Decent (mid-teens) loan growth, combined with high margins and moderating credit cost, would lead to strong medium-term earnings. We expect nearly 1.5 per cent RoA and nearly 12 per cent RoE for the bank through FY26/27," said Anand Rathi.

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