InvestorQ : Can I look to buy Bandhan Bank after its fourth quarter results for March 2019?
sara Kunju made post

Can I look to buy Bandhan Bank after its fourth quarter results for March 2019?

Answer
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1 year ago


How the results of Bandhan Bank panned out?

Bandhan Bank reported a 67% jump in net profits to Rs.651 crore for the March quarter. The net interest income (NII) for the fourth quarter was up by 45% at Rs.1258 crore. While loan growth was healthy at 38.46%, the net interest margin (NIM) was extremely healthy at 10.46%. The Gross NPAs of the bank stood at 2.04% with nearly 50% of these NPAs accounted for by IL&FS alone. That is the one time risk that Bandhan Bank runs.

Should you look to buy Bandhan Bank at current prices?

After falling sharply in October, the price of Bandhan Bank has nearly doubled in the last 6 months underlying the inherent quality of the bank. In terms of rolling profits, the stock quotes at a P/E ratio of 42X, which is quite reasonable for a private bank with a NIM in excess of 10%. We see the downside risks for the stock to be limited even if you consider the entire exposure to the IL&FS group as a write off. Investors can look to buy Bandhan Bank and hold on to the stock from a medium to long term perspective.