**Bandhan Bank** – Q3 FY20 (Cons – Un-Audited)
Total Income at 3,075 Cr
1,884 Cr (63.23%) YoY | 3,051 Cr (0.74%) QoQ
9 Months ending at Cr 9,088 Vs. 5,487 Cr (65.64%)
Net Profit of 731.03 Cr
331.2 Cr (120.84%) YoY | 971.80 Crs (-24.71%) QoQ
9 Months ending at 2,506 Cr Vs. 1,300 Cr (92.93%)
EPS (in Rs) 4.52
2.77 YoY | 6.01 QoQ
9 Months ending EPS: 15.50 Vs. 10.89
Gross NPA 1,182 Cr
831 Cr YoY | 1,064 Cr QoQ
Net NPA at 491 Cr
237 Cr YoY 337 Cr QoQ
GNPA(%) 1.93 vs 2.41 YoY 1.76 QoQ
NNPA(%) 0.81 vs 0.70 YoY 0.56 QoQ
Return on asset (%) 0.89 Vs 0.72 YoY 1.21 QoQ
View: Result is average and below expectation. Although YoY total Income increased and profit also doubled. But QoQ performance is not satisfactory total income marginally increased and profit also dipped by more than 24.7% due to additional provision of INR 200 crore on standard advances in micro finance portfolio after evaluating risk observed in certain areas of a North Eastern State. **The numbers are not comparable on quarterly or yearly basis due to the merger with Gruh Finance.**
**Business Updates & Highlights**:
Net Interest Income (Nil) for the quarter grew by 37.10% to INR 1,541 crore as against INR 1,124 crore in the corresponding quarter of the previous year.
Non-interest income grew by 52.99% to INR 358 crore for the quarter ended December 31, 2019 against INR 234 crore in the corresponding quarter of the previous year.
Operating Profit for the quarter increased by 40.56% to INR 1,265 crore against INR 900 crore in the corresponding quarter of the previous year.
Net Interest Margin (annualised) for the quarter ending December 31,2019 stood at 7.9% (merged) against 10.5% (standalone) in the corresponding quarter of the previous year.
CASA ratio at 34.31% of total deposit (excluding GRUH deposits at 35%), compared to 41.40% in the corresponding period last year and 32.90% previous quarter.
Total Advances (on book + off book) grew by 83.87% to INR 65,456 crore as on December 31,2019 against INR 35,599 crore as on December 31,2018.
Total Deposits increased by 58.51% to INR 54,908 crore as on December 31, 2019 as compared to INR 34,639 Cr as on December 31, 2018
Banking outlets as on December 31, 2019, stood at 4,288. The network consists of 1009 branches, 3,084 doorstep service centers, and 195 GRUH Centers as against 978 branches and 3,014 doorstep service centers as on December 31, 2018.
ROE and ROCE is around 19% and 11% respectively and book value per share is around INR 117 and share is currently trading at 4.4x of its book value. Bank is currently trading at annualized PE of around 26 which is fair as per Industry benchmark. Promoter holding is company is around 82.2%, FIIs hold around 6.9% in the company.
**View**: Share price high 650 (52 week) and now 513. Bandhan Bank started operations on August 23,2015, it was the first instance of a microfinance entity transforming into a universal bank in India. On the day of launch itself, Bandhan Bank started with 2523 banking outlets. Bandhan Bank has spread its presence to 34 of the 36 states and union territories in India with 4,288 banking outlets serving 1.9 Cr customers as of Dec 31, 2019.
Result is although slightly below expectation in this quarter due to excess provisioning but long term outlook remain stable and can add on every dip / correction for target price of INR 700.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.
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