Good time to buy dip in Bandhan Bank? CLSA, Jefferies bullish for up to 28% potential gains

Bandhan Bank shares in Monday's trade fell after Friday's steep gains. At the last count, shares of the private sector lender were down with a cut of over 4 per cent at Rs 43.27 per share.

The company's stock in the previous session was pushed higher as RBI gave its go-ahead for the appointment of Partha Pratim Sengupta as the lender's MD and CEO for a three-year tenure.

The lender has sought update from the National Credit Guarantee Trustee Company (NCGTC) on CGFMU and ECLGS claim. The NCGTC estimates claim payment to the bank under the government scheme at Rs 1,231 cr till March 31, 2024, while the final claim payment by 31st March 2024 will be of Rs 315 crore.

Here's what brokerages view Bandhan Bank

Goldman Sachs maintains neutral view on the stock with the target raised to 222. The stock based on the target price shows a potential upside of over 18 per cent. 

MD & CEO appointment and CGFMU claim resolution removes near-term overhang, said the brokerage. As per the brokerage, the focus now shifts to fundamentals. This RBI's go-ahead removes investor uncertainty around continuity in business momentum post-management change.

Meanwhile, Jefferies has maintained its buy call on the lender with a target price pegged at Rs 240, implying 28 per cent gains. The brokerage said the new CEO comes with a strong background. Also, CGFMU recovery adds to credibility.

Asset quality expected to behave better than other MFIs, albeit with some risks in FY25, it added.

Hong Kong-based global brokerage CLSA iterated its outperform call on the stock for a target of Rs 240. As the key overhang is now behind us, the focus will shift to the lender's fundamentals, added the brokerage.

The near-term delinquency outlook for MFI is benign but believe this is already in estimates and its price. Also, the appointment of the new CEO and MD should trigger fresh re-rating in the counter.