Despite delivering exceptional Q1 FY27 results with 35% year-on-year increase in standalone net profit to ₹502 crore, Bandhan Bank shares plunged 19% to hit the lower circuit at ₹169.56 on Wednesday, July 22, 2026, amid heavy trading volumes. The stock has declined for five straight sessions with selling pressure intensifying after the bank announced its June quarter earnings on Tuesday. The sharp decline reflects market concerns about future profitability despite the bank's strong quarterly performance, with the stock trading at its lowest level since April 24, 2026. As per The Economic Times, the weak quarterly performance with PPoP (Pre-Provisioning Operating Profit) declining 19% year-on-year due to higher operating expenses and lower non-interest income, contributed to the negative sentiment. 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, according to Managing Director Partha Pratim Sengupta.
Despite strong Q1 results, Bandhan Bank shares tanked 19% to hit the lower circuit at ₹169.56 after the bank cut its FY27 exit return on assets (RoA) guidance to 1.2-1.4% from 1.6-1.8% earlier. During the post-earnings conference call, the management issued an even more conservative outlook, lowering its FY27 exit RoA guidance to 1.0-1.4% from the earlier 1.6-1.8%. Managing Director and CEO Partha Pratim Sengupta attributed the guidance revision to external factors including volatile geopolitical environment, below-normal monsoon rainfall and tighter liquidity conditions that may lead to elevated cost of funds and higher technology expenses. According to The Economic Times, Nomura notes that 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 bank maintained its credit cost guidance at 1.6%-1.8% while expecting cost of funds and deposits to increase going forward. Motilal Oswal downgraded the stock to 'Hold' from 'Buy', citing pressure on margins and earnings, and cut its FY27 and FY28 earnings estimates by 14% and 6% respectively, now expecting the bank to deliver an RoA of 1% in FY27 and 1.4% in FY28. The market reaction highlights investor concerns about future profitability despite robust quarterly performance.
The bank demonstrated significant improvement in asset quality metrics during Q1 FY27. Gross non-performing assets (GNPA) ratio improved to 3.15% at the end of June 2026, compared with 4.96% a year prior, while net non-performing assets (NNPA) ratio declined to 0.9% from 1.0% quarter-on-quarter. According to The Economic Times, provisions, excluding tax, stood at ₹683 crore for the quarter, down 41% year-on-year from the previous period. Fresh slippages came down to around ₹630 crore from ₹1,230 crore in Q1 FY26, indicating improved credit quality. The collection efficiency for emerging entrepreneurs business (EEB) loans remained flat at 98.5% during the quarter, indicating strong recovery momentum. During the quarter, the bank transferred 2,986 non-performing asset accounts with an aggregate principal outstanding of ₹291.44 crore to asset reconstruction companies. The provision coverage ratio, including technical write-offs, stood at 85.9% as of June 30, 2026.
For the quarter ended June 30, 2026, Bandhan Bank reported standalone net profit of ₹501.67 crore, up 34.9% year-on-year but down 6.1% quarter-on-quarter from ₹534.14 crore in Q4 FY26. Net interest income rose 5.9% year-on-year to ₹2,921 crore, while net revenue increased 1.2% year-on-year to ₹3,524 crore. Net interest margin (NIM) stood at 6.2% in Q1 FY27, down 16 basis points year-on-year but up 2 basis points sequentially. Operating profit before provisions and contingencies fell 18.6% year-on-year to ₹1,358.10 crore, while profit before tax stood at ₹675.52 crore, up 29.5% year-on-year but down 11.6% quarter-on-quarter. Total income rose 0.5% year-on-year and 0.6% quarter-on-quarter to ₹6,234.38 crore. Provisions and contingencies declined 40.5% year-on-year to ₹682.59 crore, though they were marginally higher than the ₹677.01 crore reported in the March quarter. Return on assets was at 1% and return on equity at 7.7% for the quarter, while the bank's capital adequacy ratio stood at 18.2%, down from 19.4% a year earlier.
From a technical perspective, Bandhan Bank shares have broken down after failing to sustain above the ₹200-210 zone and declined below its 100-day moving average, though it continues to trade slightly above the 200-day moving average near ₹172. According to Enrich Money's Ponmudi R, a sustained break below ₹170 could open the door for further weakness, while any recovery would first need to reclaim ₹190 before sentiment improves meaningfully. The stock had already rallied more than 45% from its recent lows, with expectations of a turnaround already reflected in valuations. Market analysts note that the sharp correction appears to be driven more by disappointment in future profitability guidance than deterioration in the bank's current fundamentals. For short-term traders, experts advise against fresh buying until the stock stabilises and forms a base, while long-term investors should monitor the next two quarters for improvement in margins and management commentary before turning aggressively positive. The bank's shift towards a lower-yielding secured asset portfolio, along with macroeconomic headwinds and cost pressures, could delay its return to historical profitability levels despite near-term operational improvements.
Bandhan Bank achieved robust growth across its lending portfolio during Q1 FY27. Gross advances grew 16.4% year-on-year to ₹1.56 lakh crore as of June 30, 2026, compared with ₹1.34 lakh crore a year ago. The secured advances grew 27% year-on-year and accounted for nearly 57% of the total loan book. The retail book, excluding housing, increased 45% year-on-year, while wholesale banking advances grew 38%. The housing book registered a 6% growth during the period. On the deposit side, total deposits increased 6.6% year-on-year to ₹1.65 lakh crore as of June 30, 2026, compared with ₹1.55 lakh crore in the previous year. Retail deposits, including CASA and retail term deposits, rose 15.6%, with retail deposits accounting for 74% of total deposits. CASA deposits stood at ₹48,479 crore, while the CASA ratio remained above 29%. The bank shed bulk deposits by ₹7,000 crore and mobilised ₹30 crore through the special foreign-currency deposit mobilisation scheme.
