Noida, July 22 (APAC Media): Shares of Bandhan Bank fell sharply on Wednesday, declining 18% in early trading as investors reacted to the lender’s cautious outlook and concerns over margin pressures, despite the bank reporting strong growth in its April-June quarter results for the financial year 2026-27.
Market participants focused on the management’s conservative guidance and expectations of subdued margins, which overshadowed the bank’s healthy quarterly performance and growth figures.
Shares of Bandhan Bank tumbled 18% during Wednesday’s trading session, hitting an intraday low of ₹173.10 apiece, compared with the previous close of ₹207.81, according to data from the National Stock Exchange (NSE).
At 12:38 pm on July 22, the stock was trading 17.11% lower at ₹172.90. The decline came after the lender’s management lowered its exit return on assets (RoA) guidance during the earnings call.
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Bandhan Bank revised its RoA outlook downward by 20 basis points, lowering the expected range to 1.2%-1.4% from its earlier guidance of 1.6%-1.8%, raising concerns among investors over profitability and margin pressures.
Analysts at leading investment firm JP Morgan said the 40 basis point impact on Bandhan Bank’s return on assets (RoA) guidance was driven by tighter liquidity conditions, higher funding costs, and increased technology-related expenses.
The analysts noted that 30 basis points of the total impact stemmed from a moderation in the bank’s net interest margin (NIM) outlook, which was revised to 6.2% after the first-quarter results, compared with the earlier guidance of 6.5%. The remaining 10 basis point impact was attributed to higher technology costs.
Despite reporting a strong performance in the first quarter, Bandhan Bank shares came under heavy selling pressure on Wednesday as investors focused on the lender’s cautious outlook and conservative guidance rather than the year-on-year growth in profits recorded for the June quarter.
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“FY27 loan growth guidance was cut to the lower end of the earlier guided range of 14-15%, with a conscious slowdown in growth due to rising asset quality risks from higher energy costs, supply chain disruptions, and uncertain monsoon conditions,” JP Morgan analysts said.
Return on assets (RoA) is a key banking metric that measures a lender’s profitability by assessing its ability to generate net profits from its asset base over a given period. A downward revision in RoA guidance indicates potential pressure on margins and profitability going ahead.
On the margin outlook, Bandhan Bank’s management said profitability could remain impacted due to elevated deposit costs.
The management also flagged deposit pricing, an uncertain global economic environment, monsoon trends, and rising technology expenses as some of the key challenges and risks for the lender.
–ENDS–
Disclaimer: This article is for informational purposes only. APAC Media is not liable for any investment decisions or losses. Please conduct your own research or consult a financial advisor before investing.
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