Bandhan Bank Targets 15% Credit Growth as Asset Quality Rebounds

Bandhan Bank Limited (NSE: BANDHANBNK) is currently trading at ₹198.00, reflecting a minor intraday dip of 0.15% following a massive relief rally. On Thursday, the stock touched an intraday high of ₹201.48 and a low of ₹194.47, with significant trading volume as the market reacted to a bullish earnings outlook.

This marks a powerful recovery trend, as the stock has recently surged over 11% to hit a fresh 52-week high, outperforming the broader sector. The parabolic move comes as the bank successfully repairs its balance sheet, transforming from a stressed microfinance lender into a high-growth retail banking play.

Key takeaways from Bandhan Bank’s Q4 earnings and FY27 guidance

• Net Interest Margins improved to 6.2% in Q4, up from previous quarters, with management expecting the recovery to continue through H1 FY27.
• Credit costs have fallen to 2%, with guidance for further reduction to 1.6–1.7%, supported by fewer slippages and better recoveries.
• The ARC sale that boosted Q3 numbers played no role in Q4, making the asset quality improvement more organic and sustainable.
• CASA ratio recovered to 29% from a low of 27% in Q3, as the bank replaced high cost government deposits with stickier retail savings deposits.
• ROA moved from 0.2% in September to 0.4% in December and then to 1.1% in Q4. ROE now stands at 8.5%.
• The bank targets deposit growth slightly above the 15% credit growth goal, though management acknowledges industry wide challenges in deposit mobilisation.

Bandhan Bank Targets 6.2% NIM as Deposit Costs Decline

The primary catalyst behind this turnaround is a structural improvement in the bank’s cost of funds. Managing Director and CEO Partha Pratim Sengupta noted that high-cost deposits are being renewed at lower rates, which should sustain NIMs at 6.2% through the first half of FY27.

The bank is also seeing an organic recovery in its microfinance book. Unlike previous quarters that relied on asset reconstruction (ARC) sales, the current improvement in credit costs is driven by lower slippages across all stress buckets (SMA 0, 1, and 2). Furthermore, Bandhan has successfully swapped ₹18,000 crore of volatile, high-cost institutional deposits for ₹16,000 crore of stickier retail savings, improving its CASA ratio to 29%.

Bandhan Bank key technical levels to watch

• Bandhan Bank is currently trading at ₹198.00, consolidating just below its recent 52-week high.
• The stock hit a record intraday high of ₹201.48 yesterday, before settling slightly lower.
• Support now sits at the previous resistance breakout level of ₹170.86. A secondary psychological floor is established at ₹168.74.
• Resistance sits at the psychological round number of ₹200.00 and then the recent peak of ₹210.00, which matches Motilal Oswal’s latest target price.

Bandhan Bank outlook for FY27

Investors are now focused on the bank’s ability to maintain a 1.1% ROA and scale it toward the 1.5% target. Motilal Oswal has issued a Buy rating with a target of ₹210, citing the bank’s “Big Q4 Boost” as a primary driver.

While global inflation and West Asia conflicts remain variables for the second half of the year, the bank’s disciplined shift toward wholesale banking and retail deposits has de-risked the valuation. If credit growth hits the 15% mark as guided, Bandhan Bank is positioned to regain its status as a premier private sector lender in the Indian market.