Buy Bandhan Bank, target price Rs 490: Equirus Securities
Synopsis
Financials
The Bank reported a Gross Non Performing Assets (Gross NPAs) of Rs 873.97 Crore (.00 % of total assets) and Net Non Performing Assets (Net NPAs) of Rs 262.55 Crore (.00% of total assets). For the quarter ended 30-09-2020, The company reported a Standalone Interest Income of Rs 2792.55 Crore, up 6.51 % from last quarter Interest Income of Rs 2621.96 Crore and up 17.82 % from last year same quarter Interest Income of Rs 2370.15 Crore. The bank reported net profit after tax of Rs 920.01 Crore in latest quarter.
Investment Rationale
The brokerage appreciates the bank’s track-record to absorb event risks and believe it is well equipped (professional expertise, network and customer franchise) to change its loan mix and capitalise on the cross-sell opportunities. Initiate coverage with LONG. Key risks: Uptick in rural NPAs, delayed economic revival and imposition of lockdown.
Promoter/FII Holdings
Promoters held 40 per cent stake in the company as of Sept 30, 2020, while FIIs held 32.2 per cent, DIIs 12.7 per cent and public and others 15.1 per cent.