Bandhan Financial institution Score: Impartial – Ready to higher progress trajectory

Assortment traits within the complete portfolio improved to ~96%.

Bandhan Financial institution launched its quarterly enterprise replace highlighting the traits for Q4FY21. Advances (on guide + off guide + TLTRO investments) grew by 21.2% y-o-y (8.5% q-o-q). This progress would have been enabled by each the MFI and HFC guide as financial exercise is recovering. BANDHAN continues to report robust (36.6% y-o-y/9.5% q-o-q) deposit progress of ~Rs 780 bn, led by sturdy (~61% y-o-y/~11% q-o-q) progress in CASA deposits. The CASA ratio improved by ~50bp q-o-q to 43.4%. The proportion of Retail deposits stood at 79% v/s 81% in Q3FY21 and 78% in FY20. The LCR ratio stood at ~122% as of FY21.

BANDHAN’s assortment effectivity within the MFI portfolio has recovered to 95% for Mar’21 (v/s 90% as of sixteenth Jan’21 and 92% in Dec’20). Enchancment in MFI assortment traits is consistent with different MFI gamers. Then again, assortment effectivity within the non-micro portfolio stood secure at 98% (consistent with previous traits). Assortment traits within the complete portfolio improved to ~96%.

Valuation and think about: BANDHAN has reported robust enhancements in assortment effectivity regardless of ongoing macro challenges and election-related uncertainties. On the enterprise entrance, it reported wholesome mortgage progress, supported by the underlying restoration traits, and is effectively positioned to higher its progress trajectory. The financial institution continues to display robust traction in legal responsibility accretion led by CASA. With rising COVID-19 circumstances and fears of one other lockdown we stay watchful on the asset high quality of MFI gamers. Nevertheless, BANDHAN has restricted publicity to key COVID-19 impacted states (it has solely 5% of its branches and 4% of DSCs in Maharashtra). We preserve our Impartial ranking with TP of Rs 370 per share (2.4x FY23e BV).

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