Despite a strong performance by Bandhan Bank in the March quarter, Australian brokerage firm Macquarie continues to maintain “underperformance” on the stock citing concern on the quality of new lending. “A higher wallet share/being the sole banker partner was one of the primary investment arguments for Bandhan’s superior control over its customers’ cashflows and thus its asset quality,” the research note said. However, the bank has recently said that it plans to lower its promoter stake to 40% through OFS route and is not considering more acquisitions at present. Macquarie has maintained “underperform”, with a target price of Rs 400, implying 35% downside. Meanwhile, three other brokerages JM Financial, ICICI Securities and Arihant Capital remained upbeat and have “buy” and “hold” rating on Bandhan Bank.

Source: dna May 06, 2019 23:37 UTC