Bandhan Bank Q1 PAT jumps 35% YoY to ₹502 Cr on 40% lower provisions; operating profit slips
PAT +34.9% YoY · revenue +2.83% · margins expanding · beat vs street
₹5,630.55 Cr
+2.83% YoY
₹501.67 Cr
+34.9% YoY
8.05%
+2.1pp YoY
₹3.11
Bandhan Bank reported standalone Q1 FY27 (quarter ended June 30, 2026) net profit of ₹501.67 Cr, up 34.9% YoY from ₹371.96 Cr and beating street, which had modelled ~₹460 Cr (+23%). The entire beat is a credit-cost story: provisions (other than tax) fell 40% YoY to ₹682.6 Cr (from ₹1,146.9 Cr) as the microfinance (EEB) book normalised, with GNPA improving to 3.1% (from 5.0% YoY) and Net NPA to 0.9%. Interest earned rose just 2.8% YoY to ₹5,630.55 Cr and net total income was near-flat at ₹3,524 Cr (+1.2%), so the profit growth did not come from the topline.
Q1 FY-2027 vs prior quarters
Underneath the headline, operating profit before provisions actually fell 18.6% YoY to ₹1,358.1 Cr, because operating expenses outran income — employee cost rose to ₹1,358.3 Cr (from ₹1,123.6 Cr), including a one-off ₹60.83 Cr additional gratuity liability recognised on adoption of the new Labour Codes, and IT operating expenses nearly doubled to ₹156.2 Cr. Adjusting out that ₹60.83 Cr one-off gratuity charge, underlying PAT growth is closer to ~47% YoY. NIM was flat sequentially at 6.2% and NII grew 5.9% YoY to ₹2,921 Cr. Net profit margin (on total income) expanded to 8.05% from 6.00% a year ago, though it eased from 8.62% in Q4 — a QoQ dip that also shows in the 6.1% sequential PAT decline off a strong ₹534 Cr March quarter.
The stock went into the print at ₹207.5, down 0.3% over the past month of trading.
For context: this is the second-highest quarterly PAT of the last 6 quarters; revenue is at a 6-quarter high.
What the summary numbers don't show
Beat street — consensus saw PAT ~₹460 Cr (+23%, Zee Biz poll); actual came in ~9% ahead
Management guides for 14-15% credit growth, aiming for faster, retail-led deposit growth. They expect Net Interest Margins (NIMs) to improve by another 10-20 basis points in the near term, with a long-term target of 1.6%-1.7% for both ROA and credit costs by the exit of FY27. This will be driven by moderating credit co
— This quarter: met
Against the Q4 concall guidance, the read is mixed-to-on-track: management's 14-15% credit-growth aim was exceeded (gross advances +16.4% YoY to ₹1.56 lakh Cr, secured loans +27% and now ~57% of the book), and its call for moderating credit costs is clearly playing out. But the guided 10-20 bps near-term NIM improvement has not yet shown — NIM held flat at 6.2%. This is the first result under a leadership transition on the finance side: CFO Rajeev Mantri resigned (last day Sep 25, 2026) and the board approved Vinay Jain as interim CFO from Sep 26. MD & CEO Partha Pratim Sengupta framed the quarter as reflecting "the resilience of Bandhan Bank's franchise"; the numbers support that on asset quality and profit, but not on core operating leverage, which is where next quarter's proof lies.
What to watch
W1
NIM trajectory: management guided +10-20 bps near-term but Q1 was flat at 6.2% — watch for the promised expansion in Q2
W2
Operating profit recovery: pre-provision profit down 18.6% YoY; sustainability of the PAT print depends on opex normalising once the ₹60.8 Cr gratuity one-off rolls off
W3
Credit-cost normalisation: provisions down 40% YoY drove the beat — verify EEB collection efficiency (98.5%) holds and GNPA keeps improving toward the FY27 credit-cost exit target of 1.6-1.7%
Bank format (in ₹ Lakh); revenueFromOperations = Interest Earned. totalExpenses derived as Total Income − PBT (i.e. incl. provisions ₹682.6 Cr & opex); the statement's 'Total Expenditure' line of ₹4876.3 Cr excludes provisions. No exceptional/extraordinary items. One-off drag: ₹60.83 Cr additional gratuity liability (Labour Codes) booked in Employee Cost this quarter; also ₹215.7 Cr IFR transferred to P&L reserve (balance-sheet, not income). No consolidated (Note 14). Arithmetic ties: 5630.55+603.83=6234.38; 675.52−173.85=501.67.
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