Current Rating and Its Significance
MarketsMOJO’s 'Sell' rating for Bandhan Bank Ltd. indicates a cautious stance towards the stock, suggesting that investors may want to consider reducing exposure or avoiding new purchases at this time. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s potential risk and reward profile.
Quality Assessment
As of 09 January 2026, Bandhan Bank’s quality grade is classified as 'good'. This reflects the bank’s solid operational foundation and established presence in the private sector banking space. Despite challenges, the company maintains a reasonable asset quality and a stable customer base. However, the quality grade alone is insufficient to offset concerns arising from other parameters, particularly financial trends and technical indicators.
Valuation Perspective
The valuation grade for Bandhan Bank is currently 'attractive', signalling that the stock is trading at a price level that may offer value relative to its earnings and book value. This suggests that, from a price standpoint, the stock could be considered reasonably priced or undervalued compared to peers or historical averages. Nonetheless, attractive valuation does not guarantee positive returns if underlying fundamentals deteriorate.
Financial Trend Analysis
The financial grade is rated as 'very negative', reflecting significant headwinds in the company’s recent earnings and profitability metrics. The latest quarterly results, as of September 2025, show a sharp decline in profit before tax (PBT) and net profit after tax (PAT). Specifically, PBT fell to a loss of ₹388.65 crores, representing a 270.4% decline compared to the previous four-quarter average. PAT also dropped by 78.2% to ₹111.87 crores. Additionally, the credit-deposit ratio for the half-year period stands at a low 85.15%, indicating subdued lending activity relative to deposits. These figures highlight a deteriorating financial trend that weighs heavily on the stock’s outlook.
Technical Indicators
From a technical standpoint, Bandhan Bank’s grade is 'bearish'. The stock has underperformed key benchmarks such as the BSE500 index consistently over the past three years. Recent price movements show a mixed short-term performance with a 1-day gain of 0.34% and a 1-month increase of 3.23%, but longer-term trends remain negative with a 3-month decline of 10.93%, 6-month drop of 18.26%, and a 1-year loss of 2.28%. The bearish technical grade suggests that momentum and market sentiment are currently unfavourable for the stock.
Additional Considerations
Investor confidence appears to be waning, as evidenced by a reduction in promoter holdings. Promoters have decreased their stake by 0.63% in the previous quarter, now holding 40.29% of the company. Such a move may signal diminished confidence in the company’s near-term prospects. Furthermore, the bank’s interest income has declined by 2.16%, contributing to the negative financial results.
Here’s How the Stock Looks Today
As of 09 January 2026, Bandhan Bank Ltd. remains a small-cap player within the private sector banking segment. The current Mojo Score stands at 33.0, firmly placing the stock in the 'Sell' category. This score reflects the combined impact of the company’s financial struggles, bearish technical outlook, and cautious market sentiment despite an attractive valuation and decent quality rating.
Investors should note that while the valuation appears appealing, the ongoing financial challenges and negative technical signals suggest that the stock may face continued pressure in the near term. The 'Sell' rating advises a prudent approach, recommending that investors carefully evaluate their exposure and consider risk management strategies.
Market Performance Overview
The stock’s recent price performance has been mixed. While short-term gains have been recorded, the overall trend remains subdued. The year-to-date return is slightly negative at -0.17%, and the one-year return stands at -2.28%. This underperformance relative to broader market indices highlights the challenges Bandhan Bank faces in regaining investor confidence and market momentum.
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Implications for Investors
For investors, the 'Sell' rating on Bandhan Bank Ltd. serves as a cautionary signal. While the stock’s valuation may tempt value-oriented investors, the prevailing financial weakness and negative technical trends suggest that risks outweigh potential rewards at this juncture. Investors should closely monitor quarterly earnings updates, credit growth trends, and promoter activity to reassess the stock’s outlook over time.
Moreover, the bank’s ability to stabilise profitability and improve asset quality will be critical in reversing the current negative sentiment. Until such improvements materialise, the 'Sell' rating advises a defensive stance, prioritising capital preservation over speculative gains.
Summary
In summary, Bandhan Bank Ltd. is currently rated 'Sell' by MarketsMOJO, with this rating established on 31 October 2025. The analysis presented here reflects the stock’s position as of 09 January 2026, incorporating the latest financial results, market performance, and technical indicators. Despite an attractive valuation and good quality grade, the very negative financial trend and bearish technical outlook underpin the cautious recommendation. Investors should consider these factors carefully when making portfolio decisions involving Bandhan Bank.
About MarketsMOJO Ratings
MarketsMOJO ratings are designed to provide investors with a comprehensive, data-driven assessment of stocks based on multiple dimensions. The 'Sell' rating indicates that the stock is expected to underperform relative to the broader market and peers, signalling a higher risk profile. This rating helps investors make informed decisions by balancing valuation, quality, financial health, and market momentum.
Looking Ahead
Going forward, investors should watch for signs of financial recovery, including improved profit margins, credit growth, and stabilisation of promoter confidence. Technical indicators will also be important to gauge shifts in market sentiment. Until these factors show positive momentum, the 'Sell' rating remains a prudent guide for managing risk in Bandhan Bank Ltd.
Disclaimer
All financial data, returns, and fundamentals referenced in this article are current as of 09 January 2026. The rating was last updated on 31 October 2025 and reflects a comprehensive evaluation of the stock’s prospects at that time, supplemented by ongoing analysis of recent developments.
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