Bandhan Bank's shares dropped more than 14% in early trade on July 22 after the private lender reported its Q1 FY27 results and lowered its full-year return on assets (RoA) guidance to 1.2%-1.4% from 1.6%-1.8%. The bank posted a 34.8% year-on-year increase in net profit to ₹501.6 crore for the quarter, driven by lower provisions, but the weak margin outlook spooked investors, pushing the stock down to ₹178.75 on the BSE, according to livemint.com.
The bank's Q1 performance showed steady improvement in credit costs, which declined to 1.8%. However, management cited pressure on margins as the reason for revising down the FY27 exit RoA guidance. Bandhan Bank has also reduced bulk deposits by nearly ₹7,000 crore, while retail deposits grew 16% year-on-year. To support credit growth, the bank is exploring borrowing options and securitisation, and has mobilised ₹30 crore under the RBI’s FCNR(B) swap facility, as reported by bfsi.economictimes.indiatimes.com.
The downgrade in margin expectations comes amid a challenging environment for private lenders, where deposit mix changes and borrowing costs impact profitability. Bandhan’s reduction in bulk deposits signals a shift toward a more stable retail deposit base, which grew significantly. The bank’s move to tap borrowing and securitisation channels aligns with strategies seen in comparable lenders facing margin pressures. The stock’s sharp decline reflects investor concerns over the bank’s ability to sustain previous profitability levels, as noted by thehindubusinessline.com.
Bandhan Bank’s next key event will be its second-quarter earnings release, which investors will closely monitor to assess whether the margin outlook stabilises and credit growth initiatives gain traction. The bank’s revised RoA guidance and deposit strategy will remain focal points for market participants in the near term.