Bandhan Bank Q4FY26 profit up 68%, stock hits 52-week high

Stock jumps on earnings and broker calls

Bandhan Bank shares rallied sharply after the lender reported strong Q4FY26 results and brokerages reiterated positive views on improving asset quality and profitability. On Wednesday, the stock touched a 52-week high of ₹199.90 on the NSE and was trading around ₹196.76 near 11:08 am. The counter also saw heavy activity, with over 6.38 crore shares changing hands and a traded value of ₹1,249 crore. In another data point from the same session, the stock was reported to have hit an intraday high of ₹201.80, reflecting strong momentum.

Q4FY26 profit rises to about ₹530-534 crore

Bandhan Bank reported a sharp jump in quarterly profit, with net profit rising 68% year-on-year to ₹534 crore in Q4FY26. Another report pegged Q4 profit at about ₹530 crore (₹5.3 billion), also indicating a year-on-year rise of over 65%. The improvement was linked to sharply lower provisions and better asset quality, as highlighted across brokerage notes. Net interest income (NII) rose 4% quarter-on-quarter, supported by improved margins and steady growth. Commentary around the results also pointed to stronger fee income growth contributing to other income.

Asset quality improves, gross NPA falls to 3.27%

A key driver of the market reaction was the improvement in asset quality. Bandhan Bank’s gross NPAs declined to 3.27%, supporting the view that stress is easing versus earlier quarters. Broker notes also referenced lower slippages and lower credit costs, suggesting tighter control on incremental stress. SBI Securities described the developments as positive for the short-to-medium term, noting that microfinance (MFI) stress is gradually receding. Investors have closely tracked Bandhan’s MFI book in recent quarters, making these signals particularly relevant.

Margins and funding costs: NIM at 6.2%, guidance to expand

Bandhan Bank’s net interest margin (NIM) stood at 6.2% and management guided for a further expansion of 10-20 basis points over the next 2-3 quarters. The guidance was linked to repricing of term deposits. Broker commentary also pointed to better yields and improved funding costs as factors supporting the quarter’s operational performance. MOFSL highlighted a 30 basis points quarter-on-quarter expansion in NIMs. The bank also indicated an exit FY27 NIM guidance of 6.5% on earning assets (and 6% on total assets), based on a brokerage note.

Credit costs drop: 2% in Q4 versus 3.3% in Q3

Lower provisioning and improving credit costs were central to the profit beat. MOFSL noted credit costs improved to 2% in Q4 from 3.3% in Q3. Separately, commentary stated that credit cost (in %) has been trending downwards since the March 2025 quarter and currently stands at 3.3% of total loans. In a December 2025 conference call, management guided for credit costs of 1.6-1.7% by FY27 exit. Brokerages connected the normalisation in credit costs to the pathway for improved return metrics.

Portfolio shift continues: secured mix around 56%

Bandhan Bank’s portfolio mix continued to tilt toward secured lending, which brokerages see as helpful for stability. The secured lending share improved to about 56.2%, and another note described the secured portfolio mix at around 56%. Growth momentum also strengthened, with nearly 50% of FY26 incremental loan growth coming in the fourth quarter. Management commentary suggested a steady outlook, with loan growth targeted at 14-15% and a broadly stable mix.

Board clears ₹304 crore NPA sale via Swiss Challenge

Beyond quarterly numbers, the board’s approval for a ₹304 crore NPA portfolio sale via the Swiss Challenge method was also flagged as an important development. SBI Securities viewed the move as supportive for balance sheet cleanup. While the impact will depend on execution and recoveries, the approval itself signals a more proactive approach to resolving stressed assets. The combination of lower slippages, easing MFI stress, and an NPA sale process helped shape the short-term narrative around improving asset quality.

Broker targets move up; ratings mostly positive

Post-results, brokerages remained broadly constructive, though not uniformly bullish. Elara Securities raised its target price to ₹220 from ₹186 and increased the valuation multiple to 1.2x FY28E P/BV from 1x earlier, citing improving predictability and microfinance recovery signals. CLSA maintained an outperform rating and raised its target price to ₹220, while Jefferies retained a buy rating with a target of ₹215. UBS maintained a neutral stance but raised its target price to ₹200.

Nuvama upgraded the stock to ‘HOLD’ with a revised target of ₹190 from ₹133, citing normalisation in the EEB portfolio and better growth outlook. MOFSL maintained an ‘ADD’ and suggested a revised target price of ₹210. Separately, Motilal Oswal upgraded the stock to ‘Buy’ with an unchanged target price of ₹175 following Q3FY26 developments.

Key numbers investors tracked during the rally

The stock reaction was also amplified by volume and price action data reported during the session, alongside the key Q4 financial and operating indicators.

Valuation lens and what remains to watch

Some commentary noted the stock trades at roughly 1.2x book value, implying the market had been cautious on the recovery trajectory. A separate valuation update mentioned a fair value estimate adjusted from ₹166.25 to about ₹165.21 per share, along with a revenue growth assumption revised from 40.78% to around 40.56%. Even with a strong quarter and supportive broker notes, some houses continued to flag durability of the recent trend and residual risk in microfinance as areas to monitor. The next signposts will be the bank’s ability to sustain lower credit costs, deliver on margin guidance, and keep asset quality stable as growth picks up.

Conclusion

Bandhan Bank’s Q4FY26 print, featuring a profit jump to about ₹530-534 crore, a decline in gross NPAs to 3.27%, and lower credit costs, triggered a strong stock rally to fresh 52-week highs. Broker targets clustered between ₹190 and ₹220 in several reports, reflecting improved confidence but not a uniform view on risk. Management’s loan growth guidance of 14-15% and NIM expansion guidance of 10-20 basis points over the next 2-3 quarters will be key reference points in coming updates. Investors will also track progress on the ₹304 crore NPA portfolio sale approved via the Swiss Challenge method.