Bandhan Bank Q1 Preview: PAT seen falling up to 14% in a soft quarter

economictimes.indiatimes.com:

Bandhan Bank is expected to report muted numbers in a seasonally weak quarter, also let down by a sequential decline in loan growth. In its first quarter update, the lender said its loan growth declined 5% on a sequential basis, and deposit growth remained flat. However, erring on the optimistic side, the bank guided for a loan and deposit growth above industry levels at around 20% in FY24.

During the June quarter, the bank is likely to report up to a 14% fall in net profit, while net interest income is also likely to decline by a marginal 1-2%. Axis Securities expects the net profit figure to be around Rs 758 crore, while Motilal Oswal sees the same at Rs 820 crore. The lender had posted a net profit of Rs 887 crore in the year-ago period.

«We remain cautious on the bank’s Q1FY24 results on the recent weak business update, its CFO resignation and recent floods in Assam,» said Shreyansh Shah, Research Analyst, Stoxbox. In the preceding March quarter, Bandhan Bank’s net profit plummeted nearly 58% year-on-year (YoY) to Rs 808 crore, while NII grew nearly 19% sequentially to Rs 2,472 crore. Some key monitorable in the report card include commentary around margins and growth, especially in the EEB (emerging entrepreneur's business) segment.

Here's what brokerages expect from Bandhan Bank's Q1Axis SecuritiesThe microfinance (MFI) disbursements are expected to be weak seasonally, while margins will likely remain under pressure with CoF inching up and slower growth in the EEB book. Credit costs to taper on a sequential basis. Slippages are expected to be higher.