Mehabe score: 3 G Factor: 4 Piotski Score: 2 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 2.
Description
Bandhan Bank is a banking company, governed by the Banking Regulation Act, 1949.Pursuant to the Banking license received from Reserve Bank of India on June 17, 2015, the Bank has commenced its banking operations from August 23, 2015.(Source : 202003-01 Annual Report Page No:150)
Main Points
Net interest margin – 8.30%
Gross NPA – 1.10%
Net NPA – 0.30%
CASA ratio – 42.90%
Capital adequacy ratio – 26.20%
Cost to income ratio – 27.10%
Tier 1 capital – 21.40%
Tier 2 capital – 4.80%Site:BANDHANBNKMain Symbol:BANDHANBNK
Stock trades at 316.0, below its 50dma 321.24 and below its 200dma 332.91. The stock remains bearish on technicals
The 52 week high is at 430.70 and the 52week low is at 251.40
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 3.35 times its book value
– has low interest coverage ratio.
-Earnings include an other income of Rs.2109.06 Cr.
-Promoter holding has decreased over last 3 years: -42.29%
Competition
– The industry trades at a mean P/E of 22.1x. Kotak Mah. Bank trades at the industry’s max P/E of 34.37x. BANDHANBNK trades at a P/E of 23.0x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 6.0. BANDHANBNK has a G-Factor of 4 and Piotski scoreof 2.
– Average 1 month return for industry is 0.3%. The max 1- month return was given by IndusInd Bank: a return of 3.37 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 3001.0 cr compared to Rs 2846.0 cr for period ended Mar 2020, a rise of 5.4%
Operating Profits reported at Rs 2409.0 cr for period ended Mar 2021 vis-vis 1487.0 for period ended Mar 2020 .
Operating Margins expanded 2802.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.64 compared to Rs 3.93 for previous quarter ended Dec 2020 and Rs 3.21 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 12524.0 cr for period ended Mar 2021 vis-vis sales of Rs 10885.0 cr for the period ended Mar 2020, a healthy growth of 13.1%. The 3 year sales cagr stood at 37.6%.
Operating margins shrank to 840.0% for period ended Mar 2021 vis-vis 2584.0% for period ended Mar 2020, contraction of 174400.0 bps.
Net Profit reported at Rs 2205.0 cr for period ended Mar 2021 vis-vis sales of Rs 3024.0 cr for the period ended Mar 2020, falling 37.1%.
Company recorded a healthy Net Profit CAGR of 17.9% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 15.0% compared to 19.0% over the last 3 Years. – The stock has given a return of -16% on a 1 Year basis vis-vis a return of -18% over the last 3 Years. – The compounded sales growth on a TTM bassis is 15% vis-vis a compounded sales growth of 38% over the last 3 Years. – The compounded profit growth on a TTM basis is -27% vis-vis a compounded profit growth of 18% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 34.91% vis-vis 35.2% for Dec 2020 – Public shareholding has risen for the period ended Mar 2021. The Mar 2021 public holding stood at 23.19% vis-vis 20.43% for Dec 2020
Conclusion
– – Stock is trading at 3.35 times its book value
– has low interest coverage ratio.
-Earnings include an other income of Rs.2109.06 Cr.
-Promoter holding has decreased over last 3 years: -42.29%
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 321.24 and is trading at 316.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
