By- Tannu Puri
BANDHAN BANK saw a significant surge in its stock price, rising 7% to Rs 144.1 per share in today’s trading session, a sharp contrast to its performance over the past year. Despite this short-term gain, the stock has registered a substantial 28.9% drop over the last 12 months. The broader BSE BANKEX index, which tracks the performance of banking stocks, is up by 0.3%, reaching 55,601.8. Among the top gainers in the BSE BANKEX index today are AU SMALL FINANCE BANK, which rose by 3.8%, and IDFC FIRST BANK, up by 2.0%. On the other hand, Kotak Mahindra Bank saw a slight decline of 0.3%.
BANDHAN BANK’s Performance Over the Last Year
Over the past year, BANDHAN BANK has faced challenges, with its stock price falling from Rs 202.6 in February 2024 to its current level of Rs 144.1. This represents a loss of Rs 58.5 per share, or a 28.9% decline in value. In comparison, the BSE BANKEX index has performed better, appreciating by 5.1% during the same period. The top gainers in the BSE BANKEX index over the last 12 months have been HDFC Bank (up 19.3%), Federal Bank (up 19.1%), and ICICI Bank (up 16.1%), showing positive growth while BANDHAN BANK’s stock has lagged.
Benchmark Indices Performance
Meanwhile, the BSE Sensex is at 74,641.3, up 0.1% for the day. Among the top gainers on the Sensex are Bajaj Finance (up 2.0%) and Bajaj Finserv (up 1.7%). Notably, ZOMATO and Tata Motors are among the most traded stocks on the Sensex today. The NSE Nifty has also shown slight movement, currently standing at 22,555.8. Shriram Transport and JSW Steel are among the top gainers in the Nifty index. Over the last 12 months, the BSE Sensex has moved from 72,790.1 to 74,641.3, recording a 2.5% increase in value.
BANDHAN BANK’s Financial Performance
BANDHAN BANK reported mixed financial results for the quarter ending December 2024. The bank posted a significant 41.8% decline in its net profit, which fell to Rs 4,265 million, compared to Rs 7,327 million in the same period last year. However, the bank’s net sales saw a positive increase, growing by 17.4%, from Rs 46,654 million in October-December 2023 to Rs 54,787 million in the same quarter of 2024. For the full year ending March 2024, BANDHAN BANK reported a 1.6% increase in net profit, which reached Rs 22,296 million, compared to Rs 21,946 million in FY23. The bank’s revenue grew by 18.6%, rising to Rs 188,696 million in FY24 from Rs 159,211 million in the previous fiscal year.
Valuation
BANDHAN BANK’s Price-to-Earnings (P/E) ratio currently stands at 9.4, based on its rolling 12-month earnings. This relatively low P/E ratio suggests that the stock may be undervalued compared to its peers, although the decline in earnings has raised concerns among investors.
Conclusion
Despite a positive 7% movement in the stock price today, BANDHAN BANK has faced significant headwinds over the past year, with its stock value declining by nearly 29%. The bank’s recent quarterly financial results reflect both challenges and growth, with a sharp drop in profits but an increase in revenues. The mixed financial performance, along with the bank’s lower-than-expected stock price performance over the last 12 months, leaves investors cautiously optimistic about the potential for a rebound, especially in light of the broader banking sector’s performance and the recent uptick in its share price.
As the financial year progresses, BANDHAN BANK will need to address its profitability concerns and demonstrate consistent growth to regain investor confidence and restore its stock price momentum.
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