The share price of Bandhan Bank increased by 4.7 percent on 16 March. Japanese brokerage firm Nomura has upgraded its rating from “neutral” to “buy” considering favorable risk/reward in the stock. There was an increase in it for the second consecutive day. The stock closed at Rs 294.50 on BSE after gaining 6 per cent in the previous session.
The research firm raised its target price on the stock from Rs 330 to Rs 375, which is 33 per cent higher than its March 15 closing price.
The market saw a sharp correction due to Russia’s invasion of Ukraine and a jump in commodity prices. After which this stock fell 22 percent between February 15 and March 7.
“The recent corrections have turned risk/reward favorable for Bandhan Bank and we see several reasons for this to be positive,” Nomura said in a March 15 report.
The brokerage cited four reasons for the positive mood on it as “1) Microfinance showing recovery 2) Sharp recovery in growth disbursement 40 per cent above pre-Covid levels; 3) Collection trends nearing normalization and 4) Competitive intensity less of.”
Despite a weak macro environment, Nomura said micro factors for microfinance institutions (MFIs) remain intact and earnings estimates show upside risk (profits for FY23/24 could be around 10 per cent).
Shyam Metalics & Energy saw a rise of 6%, the stock jumped due to capacity expansion plan
For the quarter ended December 2021, the Kolkata-based private sector bank reported a profit of Rs 859 crore on account of reduction in provisions and increase in other income as against a loss of Rs 3,008 crore in the previous quarter. At the same time, a year ago, the bank had a profit of Rs 633 crore.
Provisions declined by 86 per cent to Rs 806 crore in Q3FY22, while it saw a decline of 25 per cent year-on-year.
In January 2021, Chandra Shekhar Ghosh, Managing Director and CEO of the bank said, “We have seen an all-round recovery with improved collections and growth in disbursement during the quarter.”
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