The bank has been drifting lower in recent sessions, weighed down by weak technical signals and stress in its microfinance loan book.
Bandhan Bank shares have been under pressure in recent sessions, drifting lower in what looks like a short-term downtrend.
According to SEBI-registered analyst Deepak Pal, the chart continues to show weakness, though the 200-day moving average is providing an important cushion for the stock.
Technical Picture
Pal explained that the stock is trading below its 20, 55, and 100-day exponential moving averages, a clear sign of near-term weakness. The 200-day exponential moving average (EMA), sitting close to ₹163, is the level to watch as it has been holding firm as support.
He noted that the Parabolic SAR indicator is above the candles, which typically signals a bearish phase. The Moving Average Convergence Divergence (MACD) remains in negative territory, with a declining histogram pointing to fading momentum.
The Relative Strength Index (RSI) is around 36, which is not quite in oversold territory but close, suggesting that any bounce in the near term could be limited.
Support is seen in the ₹163–162 zone, while resistance sits in the ₹170–175 range. Pal expects the stock to stay sideways to slightly bearish within this band for now, adding that a drop below ₹162 could extend the decline.
Over the longer run, however, a move above ₹175 supported by stronger fundamentals could trigger a climb toward ₹185–190.
Fundamentals Under Pressure
On the valuation side, Pal said Bandhan Bank trades at about 13 times earnings with a price-to-book ratio of 1.09. Its return on equity stands at 11–12% and return on capital employed (ROCE) is around 7–8%.
The bank recently declared a dividend of ₹1.50 per share, which works out to a yield of 0.9%.
Total deposits grew nearly 12% year-on-year in the June quarter to ₹1.51 lakh crore, while advances rose by a similar pace.
However, profits were hit hard. Net income for the first quarter (Q1) dropped 65% to ₹372 crore as provisions jumped 119%, largely due to stress in the microfinance loan book.
Pal pointed out that heavy exposure to the microfinance segment continues to drag on profitability, even as strong deposit growth and a deep rural branch network remain positives.
What’s Ahead?
Pal said some near-term buying interest may come from the dividend record date of Aug. 14. The Annual General Meeting is lined up for Aug. 21, while the October second quarter (Q2) results will be crucial in showing whether the microfinance business is stabilizing.
He recalled that back in June, the stock broke out of a one-month consolidation, sparking a buy-on-dips call toward ₹200–230. For now, Pal sees the structure as weak unless the stock can hold above ₹170.
From a long-term angle, he believes dips into the ₹160–162 support zone could be used as an opportunity to accumulate.
If the stock continues to respect this base, it may push back into the ₹175–₹180 range within six to nine months, and possibly retest the ₹200 mark if momentum improves.
What’s The Retail Mood?
On Stocktwits, retail sentiment was ‘neutral’ amid ‘normal’ message volume.
Bandhan Bank’s stock has risen 4.7% so far in 2025.
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