On the face of it, the Q3 performance of Bandhan Bank looks very good but look closer and you will see why the market is punishing it today.

The Bank reported a 121% (YoY) jump in net profit at Rs.731 crore but of this major chunk comes from Gruh Finance which was acquired by Bandhan in October.

Asset quality of the merged entity fell. Net NPA was rose further to 0.81% from 0.56% (QoQ) and Gross NPA also rose to 1.93% from 1.76%.

Bandhan’s microfinance exposure is Rs 6,500 crore, which constitutes 16% of its microfinance portfolio and 10% of its total loan book. 

The Bank said that during the quarter, it made additional provision of R.200 crore on standard advances in microfinance portfolio after evaluating risk observed in certain areas of a north eastern state.

The Bank is among the top five losers on the BSE. The stock, which has closed yesterday at Rs.518.95, opened a tad lower and slipped down to an intraday low at Rs.496 and it hovers around the same level currently.