Share Price of Bandhan Bank has dropped by 12.15% since April 5, closing at Rs 197.40. It hit a new low for the year, reaching Rs 173.40 in the latest session.
Bandhan Bank shares are trading below their moving averages for the 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day periods.
Bandhan Bank shares have been declining since CEO Chandra Shekhar Ghosh announced his retirement on April 5, effective July 9, 2024. Since then, the stock has dropped by 12.15% from its April 5 close of Rs 197.40.
In the current session, Share price of Bandhan Bank reached a new 52-week low at Rs 173.40, marking a 1.44% decrease from the previous close of Rs 175.95 on the BSE. With this decline, the banking stock has experienced a 28.64% loss in 2024, whereas the Nifty bank is down by 1.72% for the year. Despite these movements, the stock’s relative strength index (RSI) stands at 35.8, placing it neither in the oversold nor overbought zone. Over the past year, the banking stock has seen a 15% decline and a 46.56% drop over two years. Additionally, it’s trading below its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day moving averages.
A total of 6.97 lakh shares of Bandhan Bank were traded, totaling a turnover of Rs 12.19 crore on the BSE. Despite hitting a 52-week high of Rs 272 on June 1, 2023, the stock is currently trading 36.25% lower than its yearly peak. The sudden retirement of Ghosh from the top post has negatively impacted the banking stock.
Santosh Meena, Head of Research at Swastika Investmart, anticipates support for the banking stock around the Rs 180-160 levels. He commented, “Bandhan Bank is currently in a notable downtrend, potentially reaching a bottom near the Covid lows in the range of Rs 180-160 per share. However, overcoming the formidable resistance in the Rs 200-210 supply zone presents a significant challenge. Only a sustained breakthrough above Rs 210 could signal a short-term trend reversal, leading towards the Rs 250 level.”
Global brokerage firm Jefferies has downgraded Bandhan Bank to ‘Underperform’ with a price target of Rs 170. This decision follows a reduction in growth outlook and credit cost estimates for FY25-26, resulting in a 10-14% decrease in earnings per share (EPS) estimates.
According to Nirmal Bang, the stock will face uncertainty in the near term until clarity emerges on the leadership issue. With the existing leadership relatively new to the bank, there’s uncertainty surrounding succession plans after the resignation effective from July 9. Nirmal Bang noted that while valuations are inexpensive at 1.3 times FY25E P/ABV (x) and 1.1 times FY26E Accredited in Business Valuation (ABV), this is considering the projected Return on Assets (RoA) exceeding 2% and Return on Equities (RoE) of 16-17%.
