Bandhan Bank Ltd. is Rated Sell

Rating Context and Current Position

On 31 October 2025, MarketsMOJO revised Bandhan Bank Ltd.'s rating from 'Hold' to 'Sell', reflecting a significant shift in the assessment of the stock's prospects. The Mojo Score, a composite indicator of the stock’s overall health and potential, declined by 18 points, moving from 51 to 33. This change signals a more cautious stance towards the stock, urging investors to reconsider their exposure.

It is important to note that while the rating change occurred in late October, all fundamentals, returns, and financial metrics presented here are current as of 28 December 2025. This ensures that the evaluation is based on the latest available data, rather than historical snapshots.

Quality Assessment

Bandhan Bank currently holds a 'good' quality grade, indicating that the company maintains a solid operational foundation and business model. Despite recent challenges, the bank continues to demonstrate resilience in its core banking activities. However, quality alone does not offset other concerns that weigh on the stock’s overall rating.

Valuation Perspective

The valuation grade for Bandhan Bank is 'attractive', suggesting that the stock is trading at a price level that may offer value relative to its earnings and asset base. This could appeal to value-oriented investors looking for opportunities in the private sector banking space. Nevertheless, valuation attractiveness must be balanced against other factors such as financial health and market sentiment.

Financial Trend Analysis

The financial grade for Bandhan Bank is categorised as 'very negative'. As of 28 December 2025, the bank's recent quarterly results have shown a marked deterioration. Profit before tax excluding other income (PBT LESS OI) for the quarter stood at a loss of ₹388.65 crores, representing a steep decline of 270.4% compared to the previous four-quarter average. Similarly, profit after tax (PAT) for the quarter was ₹111.87 crores, down 78.2% from the prior average.

Additionally, the credit-deposit ratio for the half-year period is at a low 85.15%, signalling subdued lending activity relative to deposits. This ratio is a key indicator of a bank’s utilisation of deposits for credit growth, and a lower figure may reflect cautious lending or challenges in asset deployment.

Technical Outlook

The technical grade is 'bearish', reflecting negative momentum in the stock price and weak market sentiment. Bandhan Bank’s share price has underperformed consistently, with returns of -1.06% over the past day, -3.53% over the past week, and -4.20% in the last month. More notably, the stock has declined by -21.73% over six months and -10.34% over the past year, underperforming the BSE500 benchmark in each of the last three annual periods.

Such persistent underperformance suggests that investors remain cautious, possibly due to the bank’s financial challenges and reduced promoter confidence.

Promoter Confidence and Market Sentiment

Promoter stake in Bandhan Bank has decreased by 0.63% over the previous quarter, now standing at 40.29%. This reduction in promoter holding may be interpreted as a sign of diminished confidence in the company’s near-term prospects, which can influence investor sentiment negatively.

Implications for Investors

The 'Sell' rating assigned by MarketsMOJO reflects a comprehensive assessment of Bandhan Bank’s current fundamentals, valuation, financial trends, and technical signals. While the stock’s valuation appears attractive and the company maintains good quality, the very negative financial trend and bearish technical outlook weigh heavily on the recommendation.

For investors, this rating suggests caution. The bank’s recent earnings weakness, subdued credit growth, and declining promoter confidence indicate potential headwinds ahead. Those holding the stock may consider reassessing their positions, while prospective investors should weigh the risks carefully against the potential value opportunity.

Summary

Bandhan Bank Ltd.’s current 'Sell' rating by MarketsMOJO, last updated on 31 October 2025, is grounded in a detailed evaluation of the company’s present-day fundamentals and market performance as of 28 December 2025. Despite an attractive valuation and good quality grade, the bank’s very negative financial trend and bearish technical signals underpin the cautious stance.

Investors should remain vigilant and consider these factors carefully when making investment decisions related to Bandhan Bank. The stock’s recent underperformance and promoter stake reduction further reinforce the need for prudence in portfolio allocation.

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