Bandhan Bank shares declined nearly 20% in two days after management lowered its FY27 profitability and loan growth guidance, despite reporting a solid first-quarter performance.
The bank reduced its FY27 RoA guidance to 1.2–1.4% from 1.6–1.8%, lowered its net interest margin outlook and projected slower loan growth amid asset quality concerns and higher funding costs.
JPMorgan and Nomura retained 'Neutral' ratings, saying the management's weaker outlook overshadowed an earnings beat driven by strong net interest income, fee income and lower credit costs.
Bandhan Bank Beat Earnings Estimates, So Why Did the Stock Crash 20%?
Bandhan Bank shares tumbled nearly 20% in two sessions after management lowered its FY27 profitability and growth guidance, overshadowing a stronger-than-expected first-quarter performance
Bandhan Bank
Summary
Advertisement
Bandhan Bank shares fell approximately 20 per cent over a two-day period. The stock closed 17 per cent lower on Wednesday and declined over 3 per cent on Thursday, July 23, 2026.
Analysts attributed the sharp stock decline to the management's downgrade of profitability guidance for the 2027 financial year. These revised projections, rather than the bank's actual first-quarter performance, drove the market reaction, Moneycontrol reported.
JPMorgan Details Guidance Cuts
JPMorgan maintained a 'Neutral' rating on Bandhan Bank with a target price of Rs 175. The firm highlighted the management's commentary as the primary catalyst for the stock correction.
JPMorgan reported, "Guidance cut was the key focus in Bandhan's 1QFY27 earnings call, with a significant reduction in FY27 RoA and growth targets."
Bandhan Bank lowered its fourth-quarter FY27 return on assets (RoA) guidance by 40 basis points to 1.2-1.4 per cent, down from the previous 1.6-1.8 per cent, JPMorgan reported.
The brokerage reported a 30 basis point impact from a weaker net interest margin (NIM) outlook, as guidance was reduced from 6.5 per cent to the first-quarter level of 6.2 per cent due to tighter liquidity and elevated funding costs.
Advertisement
JPMorgan also cited a 10 basis point impact from higher operating expenses, with the opex ratio guidance raised to 4.3 per cent from 4.2 per cent to account for higher technology-related costs.
Furthermore, FY27 loan growth guidance was cut to the lower end of the 14-15 per cent range, which the bank attributed to a conscious slowdown amid asset quality risks from energy costs, supply chain disruptions and monsoon uncertainty.
Nomura Notes Earnings Beat
Nomura maintained a 'Neutral' rating on Bandhan Bank with a target price of Rs 190.
Bandhan Bank's first-quarter earnings beat Nomura's estimates by 8 per cent.
The brokerage firm reported that strong net interest income, fee income and lower credit costs supported this quarterly performance.
Despite the earnings beat, Nomura emphasised that the management's decision to cut FY27 RoA guidance to 1.2-1.4 per cent remained the primary takeaway from the results.
Advertisement