Bandhan Bank shares crash 10% after Q1 results; lender cuts RoA guidance. Should you buy, sell or hold?

Shares of Bandhan Bank plunged nearly 15% to an intraday low of Rs 177.35 on Wednesday after the private lender reported its Q1 results and lowered its return on assets (RoA) guidance, citing an uncertain global macro environment and intensifying competition in deposit pricing.The bank, which announced its April–June quarter results after market hours on Tuesday, reported a 35% year-on-year (YoY) rise in net profit to Rs 502 crore for Q1 FY27, compared with Rs 372 crore in the year-ago period.

The increase was primarily driven by a 41% YoY decline in provisions to Rs 683 crore during the quarter.Operating profit for Q1, however, declined nearly 19% YoY to Rs 1,358 crore, while net interest income (NII) increased nearly 6% YoY to Rs 2,920 crore.

Net interest margin (NIM) fell 16 bps to 6.2%.Bandhan Bank’s asset quality improved, with gross non-performing assets ratio falling to 3.15% at the end June against 4.96% a year prior.

"Higher staff expenses on account of the new labour cost and a 65% rise in tech cost following the West Asia crisis led to the surge in expenditure," managing director Partha Pratim Sengupta said.

"The lower credit cost helped the bank book higher net profit," he said.Also Read | Bandhan Bank Q1 profit jumps 35% as provisions decline sharplyMotilal Oswal on Bandhan BankMotilal Oswal Financial Services downgraded the shares of Bandhan Bank to ‘Neutral’ with a target price of Rs 225 apiece, implying nearly 8% upside potential.

The domestic brokerage said that the company’s net profit beat its estimate, driven by lower-than-expected provisioning.The NII growth of 6% was inline with expectation.

RoA guidance of 1.6-1.8% by the exit of Q4 FY27 has been cut to 1.2%-1.4% on the back of uncertain global macros and higher competitive intensity in deposit pricing, a combination of which is expected to have an adverse impact of 30 bp on NIMs and 10 bp on opex, the brokerage highlighted.Motilal Oswal slashed Bandhan Bank’s earnings estimates for FY27 and FY28 by 14% and 6% respectively, and now expects the private lender to deliver an RoA of 1% in FY27 and 1.4% in FY28.Bandhan Bank share priceBandhan Bank shares had fallen over 4% in the week through Tuesday's close at Rs 208.83.

Despite the recent decline, the stock is still up about 44% so far in 2026.

Over the past year, it has gained nearly 15%, though it remains down 5% over three years and 32% over five years.

The bank's market capitalisation stands at Rs 33,430 crore.Also Read | ICICI Bank wins analysts’ vote after Q1 show; HDFC Bank, Axis, Kotak & Yes Bank face scrutiny(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own.

These do not represent the views of The Economic Times) ...