Shares of Bandhan Bank Ltd surged over 5% on Monday's trade backed by good volumes. According to analysts, the stock was trading within a range since last few weeks.
"250-251 level is the resistance zone, a breakout above this level could lead to an upmove in the stock in short term," said Ruchit Jain, lead research, 5paisa.com.
On Friday, post market hours, Bandhan Bank reported a weak set of Q3FY23 numbers. Management had earlier indicated that slippages will remain elevated in the near term and thereby provisions.
The banks net interest income (NII) declined 2.1% on year, 5.1% quarter-on-quarter (QoQ) to ₹2,080 crore, as net interest margin (NIMs) compressed by 50 basis points (bps) QoQ (130 bps on year) to 6.5%.
Other income more than doubled on QoQ basis (up 45% YoY) at ₹1033 crore. Net profit for the bank de-grew 66.2% YoY to ₹290.6 crore. Business growth slowed down on a yearly basis as loans (gross) were up 11.1% YoY to ₹97,787 crore and sequential growth of around 2%.
Brokerage houses, ICICI direct Research report and Nuvama Wealth Management Ltd have 'hold' rating for the stock, while Motilal Oswal Financial Services Ltd has 'neutral' rating for the stock.
"We believe earnings and valuation have bottomed. While earnings will rebound in FY24E driven by below-normal credit cost and higher NIM and asset growth, long term earnings visibility from the business transformation is low as Bandhan moves away from its core competency to intensely competitive segments," said brokerage Nuvama Wealth Management.