Bandhan Bank stock tumbles over 15% as lower RoA guidance overshadows Q1 profit growth

Mumbai: Shares of Bandhan Bank fell more than 15 per cent on Wednesday after the lender lowered its return-on-assets (RoA) guidance, despite posting a stronger-than-expected rise in first-quarter profit.

The Kolkata-headquartered private lender revised its RoA target to 1.2–1.4 per cent by the end of FY27, down from its earlier guidance of 1.6–1.8 per cent. The bank attributed the downgrade to pressure on net interest margins and higher operating costs.

Bandhan Bank's stock was trading at Rs 176.95 during the day, down Rs 31.88, or 15.27 per cent, from its previous close.

Speaking during the post-earnings analyst call, Managing Director and Chief Executive Officer Partha Pratim Sengupta said the bank's long-term strategic goals remain intact, although the external environment could slow the pace of achieving its profitability targets.

"Our medium-term strategic objective remains unchanged, and we continue to work towards achieving the guided level of RoA. The prevailing external environment may influence the pace at which we get there," he said.

The bank reported a return on assets of 1 per cent at the end of June, an improvement of 20 basis points year-on-year, though it was 11 basis points lower sequentially. Sengupta said higher funding costs driven by external uncertainties, along with increased technology-related spending, had affected the revised guidance.

For the first quarter of FY27, Bandhan Bank posted a 35 per cent year-on-year increase in net profit to Rs 502 crore, compared with Rs 372 crore in the corresponding quarter last year.

Its net interest income (NII) rose 5.9 per cent to Rs 2,921 crore, while net total income increased 1.2 per cent to Rs 3,524 crore.

The bank's gross advances grew 16.4 per cent year-on-year to Rs 1,55,555 crore as of June 2026. Growth remained strong across segments, with the retail loan portfolio (excluding housing) expanding 45 per cent, wholesale banking growing 38 per cent, and the housing loan book increasing 6 per cent.

Asset quality also improved significantly, with the bank reporting a 182-basis-point decline in gross non-performing assets (NPA) and a 43-basis-point improvement in net NPA compared with a year ago.

Bandhan Bank said it remains focused on customer-centric, digitally driven growth by strengthening its distribution network and expanding its range of financial products.

With inputs from IANS