Emkay Global maintains buy on Bandhan Bank, reduced target price to Rs 600

Emkay Global has maintained its buy rating on Bandhan Bank but reduced its target price to Rs 600 from Rs 660 in the long term, factoring in a marginal earnings cut and also multiple cut. Shares of Bandhan Bank declined 1.19% to Rs 450 on Monday, while the BSE sensex closed 261.68 points down at 37,123.31.

Company Financials

The bank has reported Gross Non Performing Assets (Gross NPAs) of Rs 850.99 crore (2.02 % of total assets) and Net Non Performing Assets (Net NPAs) of Rs 232.26 crore (.56% of total assets). For the quarter ended 30-06-2019, the company has reported standalone interest income of Rs 1786.29 crore, up 12.08 % from last quarter interest income of Rs 1593.79 crore and up 37.61% from last year same quarter interest income of Rs 1298.05 crore. The bank has reported net profit after tax of Rs 701.14 crore in the latest quarter.

Investment Rationale

The bank has a good track record of managing disruptions due to its strong customer connect, credit monitoring/recovery mechanism; however, we remain watchful in the near term, said the brokerage.