Bandhan Bank down despite good Q3

Bandhan Bank is the top trending stock on social media since morning. Despite posting a good show for Q3FY19, the Bank is down over 2.5% at Rs.459.05.

Thanks to the NI, which was at its highest in Q3 at Rs.1124 crore, posted a 10% (YoY) rise in net profit at Rs.331 crore.

This is another Bank with exposure to IL&FS and in current Q3 it fully provided for this contingency, with provisions at Rs.385 crore.

In terms of asset quality, Gross NPA for Q3 stood at 2.41% v/s 1.29% (QoQ), an increase of 112 bps while NPA remained stable at 0.7%.

Post this performance, foreign brokerage firm, Macquarie downgraded the stock to ‘Underperform’ from ‘Neutral’ and cut the target price from Rs.560 to Rs.400.

The brokerage stated in the note that it expects the stock to underperform despite the strong numbers while adding that the acquisition of Gruh Finance opens up a new set of uncertainties.