Shares of Bandhan Bank plunged 15% on Wednesday after the Kolkata-based private lender slashed its FY27 return on assets (RoA) guidance while announcing its Q1 results, prompting mixed reactions from brokerages.

The stock remained locked in the 15% lower circuit at Rs 177.50 on the NSE and was on track to post its sharpest intraday decline since the Covid-19 market crash in March 2020.

Bandhan Bank reported a 35% year-on-year (YoY) rise in net profit to Rs 502 crore in Q1 FY27, from Rs 372 crore in the same period last year. This came as provisions declined 41% to Rs 683 crore during the quarter under review. Operating profit, however, declined nearly 19% YoY to Rs 1,358 crore, while net interest income (NII) increased nearly 6% YoY to Rs 2,920 crore during the quarter under review. Net interest margin (NIM) fell 16 bps to 6.2%.

Bandhan Bank’s asset quality improved, with gross non-performing assets ratio falling to 3.15% at the end June against 4.96% a year prior. "Higher staff expenses on account of the new labour cost and a 65% rise in tech cost following the West Asia crisis led to the surge in expenditure," managing director Partha Pratim Sengupta said. "The lower credit cost helped the bank book higher net profit," he said.

Also read | Bandhan Bank Q1 profit jumps 35% as provisions decline sharply

Nomura on Bandhan Bank share price

Nomura noted that Bandhan Bank's Q1 net profit beat its estimates by 8%, driven by stronger net interest income (NII), fee income and lower credit costs. However, the brokerage said the key takeaway was management's decision to cut its FY27 RoA guidance to 1.2-1.4% from 1.6-1.8%, citing pressure on the cost of funds and higher technology-related operating expenses.

According to Nomura, 30 basis points of the 40-bps guidance cut reflects the bank's reduced expectations for net interest margin (NIM) expansion over the coming quarters, while the remaining 10 bps is attributable to higher technology-related operating costs.

The brokerage has a ‘Neutral’ call on the shares of Bandhan Bank, with a target price of Rs 190 apiece, implying a 9% downside potential from the stock’s previous closing price of Rs 208.83 apiece on NSE.

CLSA on Bandhan Bank share price

CLSA said Bandhan Bank reported a decent quarter, but a cautious management outlook. Its net profit was slightly lower than the brokerage’s estimate, while NII beat expectation by 4%. Highlighting that management cut its FY27 exit ROA target from 1.6%-1.8% earlier to 1.2%-1.4% now citing higher funding costs and a challenging external environment, CLSA said its estimate was lower anyway (FY28 ROA of 1.3%).

CLSA has an ‘Outperform’ rating on the shares of Bandhan Bank with a target price of Rs 235 apiece, implying a 12.5% upside potential.

Also read | Bandhan Bank shares crash 10% after Q1 results, RoA guidance cut. Time to sell?

Jefferies on Bandhan Bank share price

Jefferies said Bandhan Bank’s Q1 profit was ahead of estimate with better loan growth, fees and MFI asset quality. Still, management lowered FY27 RoA guidance. The international brokerage said while the estimates were below guidance and it sees benefits from FCNR-B inflows (not in guidance), it cut estimates by more than 10%.

Jefferies has a ‘Buy’ call on the shares of Bandhan Bank, with a target price of Rs 240 apiece, implying 15% upside potential.

Macquarie on Bandhan Bank share price

Macquarie said the road to recovery for Bandhan Bank looks uncertain, with profit missing estimates, margin outlook cut and elevated credit costs.

The international brokerage has an ‘Underperform’ rating on the shares of Bandhan Bank, with a target price of Rs 130 apiece, implying 38% downside.

Nuvama on Bandhan Bank share price

Bandhan Bank reported a weak quarter in Q1 FY27 after a steady improvement in H2 FY26, Nuvama said, as it cut the lender's earnings estimates by 11-14% over FY27-29, factoring in Q1 earnings miss and weaker opex and margin guidance.

Nuvama downgraded its rating on the shares of Bandhan Bank from ‘Buy’ to ‘Hold’, and reduced its target price to Rs 230 apiece. This implies more than 10% upside potential.

Also read | Bandhan Bank shares crash 15% after Q1 results; lender cuts RoA guidance. Should you buy, sell or hold?

JPMorgan on Bandhan Bank share price

JPMorgan said the guidance cut was the key focus in Bandhan Bank’s Q1 earnings print, with a significant cut in FY27 RoA and growth targets. “Also, FY27 loan growth guidance was cut to lower end of the 14-15% range guided earlier with a conscious growth slowdown owing to rising AQ risk from higher energy costs and supply chain disruptions as well as uncertain monsoons,” it added.

The firm has a ‘Neutral’ call on the shares of Bandhan Bank with a target price of Rs 175 apiece, implying 16% downside potential.