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Business News/ Markets / Stock Markets/  Bandhan Bank shares: Bear-trap worry returns as stock hits new 3-year low

Bandhan Bank shares: Bear-trap worry returns as stock hits new 3-year low

Bandhan Bank shares quoted at its lowest level since April 2020. It had hit a record low of ₹152.35 on 25 March, 2020

Daily activity at Bandhan Bank, Kankurgachi Branch, Kolkata.Premium
Daily activity at Bandhan Bank, Kankurgachi Branch, Kolkata.

Shares of Bandhan Bank witnessed heavy selling in Tuesday's intra-day trade, with the stock tanking nearly 8 per cent to hit a fresh 52-week low of 182.20 on BSE, even as the BSE Bankex constituents were trading mostly flat.

The stock of private sector lender has lost 14.25 per cent in three sessions and was the worst hit on the Nifty Bank index. Bandhan Bank shares quoted at its lowest level since April 2020. It had hit a record low of 152.35 on 25 March, 2020.

The fall in trade today was backed by significant volumes of over 17 million shares, more than 2 times the 6-month daily average trading volume of more than 8 million shares.

The Kolkata-based new generation bank said, fall in NII was primarily because the higher reversal of interest income and also an increase in the cost of funds.

The lender's net interest margin for the quarter was 6.5 per cent as aginst 7 per cent in the previous quarter. During the quarter, Bandhan Bank has sold written off loans 8,897 crore at an aggregate value of 801 crore out of that 387 crore has been issued as Security Receipts.

Bandhan Bank's management had said with the initial trends and reports from the growth, they are confident that Q4 will see good improvement in the performance of the bank.

Brokerage Emkay Global said that Bandhan Bank is expected to log a better 4Q versus 3Q, and could see interest from Alpha-seeking investors. The brokerage has a 'Buy' call on the Bandhan Bank stock.

Kotak Institutional Equities also has a ‘Buy’ rating on Bandhan Bank with a revised target of 250 from 270.

Meanwhile, Nuvama Institutional Equities recently said that the bank's earnings and valuation have bottomed out, and one could see them rebounding in FY24 on normalising credit cost, higher NIM, and asset growth.

Nuvama further said that the long-term earnings visibility from the business transformation is low for the bank as it moves away from its core competency to intensely competitive segments.

The brokerage has a ‘hold’ recommendation on the stock with a target price of 265.

Shares of Bandhan Bank closed 5.33 per cent lower at 187.25 apiece on Tuesday in their third straight session of losses.

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Published: 28 Mar 2023, 04:28 PM IST
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