Bandhan Bank shares jumps 6% after announcing its Q3 results; Check the details

Synopsis: Bandhan Bank shares rose 6.5 percent after Q3 profit jumped 84 percent, driven by advances growth, improving asset quality, stable margins, and cautious optimism from brokerages’ outlook.

The shares of this company, which provides a full range of banking products, including savings/current accounts, loans, fixed deposits, debit/credit cards, mutual funds, insurance, and digital banking in focus with its Q3 results.

With a market capitalization of Rs 24,300 crore, Bandhan Bank Ltd’s shares on Friday made a day high of Rs 152.15 per share, up by 6.5 percent from its previous day’s close price of Rs 142.65 per share. The share has given a negative return of 52 in the last five years.

Results highlights

QoQ

The bank reported a NII of Rs 26,900 crore in Q3 FY26, up 3.8 percent QoQ, and NIM of 5.9 percent in Q3 FY26, improved by 6 bps QoQ. In Q3 FY26, reported GNPA of 3.3 percent and NNPA of 1 percent, improving by 169 bps and 38 bps, respectively. Accompanied by a PAT growth of 83.9 percent QoQ to Rs 206 crore.

YoY

The bank reported a NII of Rs 26,900 crore in Q3 FY26, down 4.5 percent YoY, and NIM of 5.9 percent in Q3 FY26, degraded by 97 bps QoQ. In Q3 FY26, reported GNPA of 3.3 percent and NNPA of 1 percent, improving by 136 bps and 29 bps, respectively. Accompanied by a PAT declnied by 51.7 percent QoQ to Rs 206 crore.

Factors that led to the surge

Profit growth: The bank reported a strong sequential recovery, with profit after tax rising 84 percent quarter-on-quarter to Rs 206 crore from Rs 112 crore, supported by healthy loan book expansion, as advances grew 10 percent year-on-year and 4 percent quarter-on-quarter to Rs 1.45 lakh crore, reflecting improved business momentum.

Asset quality improved: The bank’s asset quality showed a marked improvement during the quarter, with the GNPA ratio declining to 3.3 percent, improving by 136 basis points YoY and 169 basis points QoQ. Net NPAs also moderated to 1 percent, down 29 basis points YoY and 38 basis points QoQ, reflecting better recoveries and lower incremental stress in the loan book.

Lower asset quality stress translated into improved profitability metrics, with credit costs easing to 3.3 percent, down 85 basis points YoY and 12 basis points QoQ. The bank’s balance sheet strength remained comfortable, supported by a healthy capital adequacy ratio of 17 percent, providing adequate headroom to support future growth.

Brokerage Views

CLSA highlighted operational recovery at Bandhan Bank, with pre-provision operating profit exceeding expectations and improved slippages, signalling a better performance after a prolonged period of operational and asset-quality challenges.

Margins stabilised after two consecutive quarters of sharp decline, indicating easing pressure on core profitability. However, profit before tax missed estimates by 9 percent, suggesting the recovery remains gradual rather than fully entrenched.

Macquarie noted that Bandhan Bank’s PAT beat was primarily driven by higher other income rather than core operating performance. Slippages remain elevated, and credit costs are still high, indicating that asset quality challenges have not fully normalised.

The brokerage expects net interest margins to improve gradually over the coming quarters. While the recovery is likely to be slow, stabilising margins provide some support to earnings, leading Macquarie to maintain a cautious yet positive outlook on the stock.

Incorporated in 2014, Bandhan Bank is a commercial bank focused on serving underbanked and underpenetrated markets in India. The company has a PAN-India presence and offers a wide range of banking products & services and asset & liability products and services designed for micro banking and general banking.

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