**Bandhan Bank** – Q4 FY20 (Cons – Audited)
CMP: 233
Total Income at 3,346 Cr
2,203 Cr (51.83%) YoY | 3,075 Cr (8.81%) QoQ
Year ended 12,434 Cr Vs. 7,706 Cr (61.39%)
Net Profit of 517.2 Cr
650.8 Cr (-20.44%) YoY | 731.03 Crs (-29.26%) QoQ
Year ended 3,023 Cr Vs. 1,951 Cr (54.93%)
EPS (in Rs) 3.21
5.45 YoY | 4.52 QoQ
12 months ended EPS: 18.76 Vs. 16.01
Gross NPA 993 Cr
820 Cr YoY | 1,181 Cr QoQ
Net NPA at 389 Cr
228 Cr YoY 491 Cr QoQ
GNPA(%) 1.48 vs 2.04 YoY 1.93 QoQ
NNPA(%) 0.58 vs 0.58 YoY 0.81 QoQ
Return on asset (%) 0.59 Vs 1.28 YoY 0.89 QoQ
View: Result is overall good (Includes Gruh finance merger result). YoY total income increased but profit decreased due to high provision in this quarter around 827 Cr (Including Covid provision around INR 690 Cr) as against 153 Cr in corresponding previous quarter.
**Business Updates & Highlights**:
Net Interest Income (NII) for the quarter grew by 33.57% to ₹1,680 crore as against ₹1,258 crore in the corresponding quarter of the previous year.
Non-interest income grew by 28.87% to ₹500 crore for the quarter ended March 31, 2020 against ₹388 crore in the corresponding quarter of the previous year.
Operating Profit for the quarter increased by 31.83% to ₹1,521 crore against ₹1,154 crore in the corresponding quarter of the previous year
Capital Adequacy Ratio (CRAR) at 27.43%; Tier I at 25.19% and CET 1 at 25.19%.
Total Advances (on book + off book) grew by 60.46% to ₹71,846 crore as on March 31, 2020 against ₹44,776 crore as on March 31, 2019 and 9.76% QoQ against ₹65,456 crore as on December 31, 2019.
Total Deposits increased by 32.04% to ₹57,802 crore as on March 31, 2020 as compared to ₹43,232 crore as on March 31, 2019 and 3.96% QoQ against ₹54,908 crore as on December 31, 2019
**Financial**
ROE and ROA is around 22% and 21.1% respectively and book value per share is around INR 86 and share is currently trading at 2.9x of its book value. Bank is currently trading at annualized PE of around 13 which is good as per benchmark. FIIs and mutual fund hold around 13.05% and 2.7% respectively and which is slightly declined by FIIs and mutual fund both. Top 3 Advances are as follows:
Agriculture INR 20,702 Cr 28.8%
Affordable housing INR 18,519 Cr 25.8%
Food Processing INR 14,835 Cr 20.6%
**Share View**: Share price high 650 (52 week) and now 234 almost more than 65% corrected from their peak. The majority of declined due to bad asset quality report and due to riots in North East (Assam) their north east portfolio badly impacted. further after Yes bank collapsed Bandhan also impacted. Banking outlets as on March 31, 2020, stood at 4,559. The network consists of 1018 branches, 3,346 banking units (DSC) and 195 GRUH Centers as against 986 branches and 3,014 banking units (DSC) as on March 31, 2019.
Strong support at INR 175. Short term share can bounce back till 257/275.
Opportunities: Almost 64% corrected from their peak. Long term investor has good opportunity to accumulate as share is beaten down value. Since consolidated growth for bank (including Gruh finance) is good.
Risk: Small private bank badly hammered after Yes Bank collapsed. And further the Covid – 19 spread bank has already taken higher provision in this quarter and this can further add to Q1 and Q2 FY21 also. Various brokerage house has also downgraded the bank prospectus and suggested the target price in two digit as well.
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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