BANDHANBNK - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 How I’m Thinking About This

You’re asking for a full-spectrum fundamental analysis of Bandhan Bank Ltd (BANDHANBNK), a unique blend of microfinance and commercial banking. I’m evaluating its financial strength, valuation metrics, business model, and technical indicators to determine its long-term investment potential and ideal entry point.

📊 Core Financials Breakdown

Profitability & Growth

EPS: ₹12.8 — modest earnings base

PAT Qtr: ₹372 Cr vs ₹318 Cr — sequential growth, but YoY profit down 65%, indicating volatility

ROE: 11.9%, ROCE: 7.82% — below ideal for banking sector

Debt-to-equity: 6.60 — high, typical for banks but needs monitoring

Balance Sheet & Dividend

Book Value: ₹153 — price-to-book ratio ~1.09, fair valuation

Dividend Yield: 0.90% — decent payout for income investors

Institutional sentiment: FII holdings up (+1.61%) — positive signal

💰 Valuation Indicators

Metric Value Interpretation

P/E Ratio 13.1 Fairly valued vs industry PE of 12.6

P/B Ratio ~1.09 Reasonable for a bank

PEG Ratio 0.07 Attractive — undervalued relative to growth

Intrinsic Value ~₹175–₹185 Slightly undervalued at current price

Valuation is compelling, especially with a low PEG ratio and improving quarterly profits.

🏦 Business Model & Competitive Edge

Industry: Banking — high competition, but essential services

Moat: Strong presence in underserved rural and semi-urban areas

Catalysts

Expansion in retail banking

Improved digital banking infrastructure

Unique positioning in microfinance with commercial banking license

Bandhan Bank’s hybrid model gives it access to high-yield lending and underserved markets, though asset quality and regulatory scrutiny remain key risks.

📉 Technical & Entry Zone

Current Price: ₹167

DMA 50/200: Trading near both — neutral trend

MACD: -1.44 — mild bearish momentum

RSI: 51.1 — neutral zone

📌 Suggested Entry Zone: ₹155–₹165

This range offers a better margin of safety and aligns with technical support levels.

🕰️ Long-Term Holding Guidance

Hold if already invested, especially with improving fundamentals

Buy on dips near ₹160 if bullish on financial inclusion and rural credit growth

2026 Target Price: ₹198–₹222 based on projected recovery and sector tailwinds

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⭐ Fundamental Rating

3.8

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