Bandhan Bank brokerage upgrades lift stock in FY26

Market action: Bandhan Bank jumps on a string of upgrades

Bandhan Bank shares surged on Friday after several brokerages upgraded their ratings, boosting sentiment around the lender following its December-quarter (Q3FY26) results. The stock rose as much as 5.50 percent intraday to ₹150.50 before paring some gains. Around 10:30 am, it was trading 4.49 percent higher at ₹149.05 on the BSE. The broader market was weaker at the same time, with the Sensex down 0.15 percent at 82,183.53. The sharp move reflected renewed optimism that profitability and asset quality are gradually stabilising after a prolonged stress phase.

What brokerages cited: asset quality, valuations, and operating metrics

The rally followed positive commentary from brokerages including Motilal Oswal, JM Financial, and Emkay Global, which upgraded their views after the quarterly print. Their notes pointed to improving operating metrics and valuations they described as reasonable after years of de-rating. While the bank’s profitability was still described as muted, the upgrades suggested analysts are focusing on the direction of travel on margins and asset quality. A separate reference in the supplied data also noted a positive shift in sentiment despite weak quarterly results, linking it to improving asset quality and the prospect of higher institutional ownership. MarketsMOJO also upgraded its rating to ‘Hold’, according to the provided text.

Q3FY26 snapshot: profit improves, credit costs still a drag

Bandhan Bank reported a net profit of ₹210 crore for Q3FY26. The figure was up 84 percent quarter-on-quarter (Q-o-Q), aided by better margins and higher other income. However, profitability remained constrained due to elevated credit costs and one-off expenses, as stated in the text. The result set the context for upgrades that leaned on the idea of a gradual recovery rather than an immediate turnaround.

Motilal Oswal: ‘Buy’ maintained with ₹175 target

Motilal Oswal upgraded Bandhan Bank to ‘Buy’ and kept its target price unchanged at ₹175. The brokerage said this implied an upside of about 23 percent. It expects the bank’s return on assets (RoA) to recover to 1.3-1.5 percent over FY27-28 versus an estimated 0.6 percent in FY26, as asset quality normalises and margins stabilise. Motilal Oswal also pointed to valuations after nearly five years of de-rating as a supporting factor.

JM Financial: ‘Add’ with ₹160 target and valuation framework

JM Financial upgraded the stock to ‘Add’ from ‘Hold’ and revised its target price to ₹160. It valued the bank at 0.8 times FY28 book value. The brokerage expects average RoA of about 1.2 percent and RoE of about 11 percent over FY27-28. It also said downside risks appeared limited at the current valuation of around 0.7 times FY28 price-to-book.

Upgrade list: multiple firms raise views and targets

A set of brokerage actions included several upgrades dated 23/01, alongside a later update dated 26/01. These changes ranged from upgrades to ‘Buy’ to revisions in target prices. Nomura, for instance, adjusted its target to ₹160 from ₹170 and kept a ‘Neutral’ stance (26/01). Earlier, on 03/11, Nomura adjusted its target to ₹170 from ₹185 and also kept it ‘Neutral’. Other brokerage actions listed upgrades from ‘Hold’, ‘Neutral’, ‘Reduce’, and ‘Accumulate’ to more positive ratings with targets spanning the ₹160 to ₹186 range.

Analyst consensus: different datasets show mixed upside

The supplied text includes multiple consensus snapshots from different sources and analyst counts. One consensus block shows “Mean consensus: OUTPERFORM” with 24 analysts, last close price of ₹158.44, and an average target price of ₹166.25, a spread of +4.93 percent. Another consensus section based on 25 analysts shows 56 percent ‘Buy’, 32 percent ‘Hold’, and 12 percent ‘Sell’, with an average target price of ₹186.68. In that same block, the target price of ₹186.68 is described as a “slight upside of 4.76%” compared to a current price of ₹178.19. A separate forecast line states an average 12-month stock forecast of ₹186.21 with an upside of 0.32 percent, with a range of ₹131.30 to ₹239.40, based on the ratings of 32 analysts.

The text also flags a practical tension: some average analyst price targets were described as ranging from ₹165 to ₹176 and sitting below the stock’s trading price at that time, suggesting the rally may have outpaced consensus upside expectations.

EPS and revenue expectations: near-term estimates in focus

The data notes Bandhan Bank’s EPS for the last quarter was ₹2.30 versus an estimate of ₹2.56. For the next quarter, EPS is expected to reach ₹2.73. On revenue, the next-quarter estimate is given in two places as ₹30.85 billion and ₹31.96 billion. Normalised into Indian “crore” units, these translate to about ₹3,085 crore and ₹3,196 crore, respectively. The presence of two revenue estimates in the supplied text indicates multiple forecast snapshots rather than a single consolidated number.

CLSA call: ‘high conviction outperform’ and microfinance recovery view

In another update, CLSA upgraded Bandhan Bank to ‘high conviction outperform’ from ‘outperform’ with a target price of ₹220 per share. CLSA said the Indian microfinance space may improve in phases, describing conditions as moving “from bad to less bad” in coming quarters and normalising by the second quarter of fiscal 2026. It also pointed to early signs of improvement in collection efficiency and suggested that if sustained, slippages could improve with a lag. In that market move, the stock rose as much as 4.77 percent to ₹143, and later traded at ₹142.2 per share around 10:05 a.m., while the Nifty 50 was down 0.43 percent.

Bloomberg data cited in the same section showed 28 analysts tracking the company, with 15 ‘buy’, eight ‘hold’, and five ‘sell’ ratings. The 12-month consensus target price was ₹174.1, implying an upside of 22.1 percent (as stated in the text).

Broader banking backdrop: growth expectations into FY27-28

The wider context in the supplied text points to expectations of a rebound in the broader Indian banking sector. Earnings were projected to grow at around 17 percent CAGR over FY27-28, led by private banks benefiting from faster loan growth and improving net interest margins. This sector view matters for Bandhan Bank because several upgrades explicitly reference stabilising margins and normalising asset quality as core drivers for an RoA recovery over FY27-28.

Market impact and what investors are watching next

Bandhan Bank’s sharp intraday move illustrates how quickly sentiment can shift when multiple brokerages upgrade at once. But the data also shows the market is working through a wide range of price targets and consensus estimates across sources, including targets below and above various reference prices. Investors are also tracking whether the bank can sustain the profit improvement seen in Q3FY26 while reducing credit costs and limiting one-off expenses. Near-term attention is likely to remain on upcoming quarterly EPS expectations (₹2.73) and how the bank’s operating metrics evolve relative to broker projections for FY27-28 RoA and RoE.

Conclusion

Bandhan Bank’s rally followed a cluster of upgrades after Q3FY26 results, with brokerages highlighting improving asset quality trends and valuations after a long de-rating cycle. The next set of quarterly results and updates on credit costs, margins, and collections will be key to assessing whether the upgrades translate into sustained consensus upgrades and tighter target ranges.