Bandhan Bank's shares fell by about 6% on October 31, after CLSA downgraded its rating from 'Buy' to 'Accumulate' and cut the target price from ₹220 to ₹190 following the Q2 results. The bank's Q2 net profit dropped 88% to ₹112 crore, while net interest income and operating profit also registered a decline.
Bandhan Bank Share Price: On October 31, Bandhan Bank shares saw a decline of about 6% following the weak Q2 FY2025 results. Citing the bank's weak net interest income and operating performance, CLSA downgraded its rating from 'Buy' to 'Accumulate' and set a target price of ₹190. The bank's quarterly net profit decreased by 88% year-on-year to ₹112 crore, while provisions increased to ₹1,153 crore. CLSA expects the bank's Net Interest Margin (NIM) to improve in FY2027.
Weak Quarterly Results Cause Investor Concern
Bandhan Bank presented its Q2 results for FY2025-26, which were significantly below market expectations. The bank's net profit in the September 2025 quarter plummeted by 88 percent to just ₹112 crore. In the same period a year ago, the bank had reported a profit of ₹937 crore.
Operating profit also fell to ₹1310 crore, compared to ₹1855 crore in the September 2024 quarter. Net Interest Income (NII) stood at ₹2589 crore, whereas it was ₹2934 crore in the same period last year. This marked the second consecutive quarter for the bank to see a decline in both income and profit.
Sharp Rise in Provisions and Contingencies
Another challenge for Bandhan Bank was the sharp increase in provisions, i.e., the amount set aside for potential losses. In the September 2025 quarter, the bank's provisions and other contingencies surged to ₹1153 crore, up from ₹606 crore in the same quarter last year. This directly impacted the bank's net profit.
The Provision Coverage Ratio (PCR) stood at 73.7 percent, which, while showing a slight improvement compared to the last few quarters, indicates that pressure on the bank's credit quality persists.
CLSA Downgrades Rating, Cuts Target Price
Following the weak quarterly performance, brokerage firm CLSA has downgraded its rating on Bandhan Bank from 'Buy' to 'Accumulate'. CLSA also reduced the bank's target price from ₹220 to ₹190 per share. This implies that the brokerage has cut the bank's fair value by approximately 13.6 percent.
CLSA stated that the bank's net interest income and pre-provision operating performance were weak. Additionally, the bank's credit cost, i.e., the cost of potential losses on loans, remained high. According to the report, the bank's Net Interest Margin (NIM) decreased by 60 basis points due to a fall in yields and repo rate pass-through. However, the brokerage believes that the bank's margin could show improvement again by FY2027.
11 Percent Decline in Share Price Over One Year
Currently, Bandhan Bank's market capitalization is approximately ₹26,000 crore. The face value of the share is ₹10. Over the past year, the bank's shares have fallen by about 11 percent.
The share's 52-week high was ₹192.45, recorded on June 30, 2025. Its 52-week low was ₹128.15, observed on February 18, 2025. Looking at current prices, the share has once again approached its lower levels.
