Target: ₹160
CMP: ₹149.35
Bandhan’s operational indicators in the Emerging Entrepreneurs Business (EEB) segment are showing gradual signs of improvement, with X-bucket CE improving to 99.6 per cent since Nov’25 and better early-stage delinquency indicators pointing to lower forward flows.
We expect Bandhan’s RoA/RoE to improve to 1.2-1.5/10-13 per cent over FY27-28E vs. an unimpressive 0.5/4 per cent in FY26E. With EEB slippages declining, early delinquency indicators improving and bank strengthening and enhancing its risk framework across segments, credit costs are expected to ease gradually thereby supporting earnings. NIM cycle appears to have bottomed out; and MFI growth resumption, deposit repricing and improving CASA mix is expected to drive 35-50bps NIM expansion over the next few quarters.
We value the stock at 0.9x Sep’27E ABV vs. current valuations of 0.8x Sep’27E ABV to arrive at a target price of ₹160/share. We revise our rating from Hold to Buy on reasonable valuations. A meaningful re-rating would be driven by sustained growth delivery and decisive trends, indicating improving profitability.
Key Risks: A slowdown in overall credit momentum which could potentially derail earnings momentum for the bank; and any additional asset quality stress arising from the EEB book could potentially impact our earnings estimates.
Published on January 23, 2026
