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Ambit Capital slashes price target for Bandhan Bank by 84%, maintains sell

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NEW DELHI: Ambit Capital has slashed the target price for shares of Bandhan Bank by 84% to ₹65 from ₹365 as it expects a significant deterioration in the lender's asset quality in FY21 due to the covid-19 outbreak.

The brokerage has maintained its 'sell' rating on the stock. The cut in the target price is driven by expectations of losses in the current financial year and a single digit return on equity (RoE) over the next 4-5 years, the brokerage said, adding that multiples for microfinance sector will also come down given the high asset quality risk coming to the fore.

Shares of Bandhan Bank closed 0.7% lower at ₹192.30 apiece on the BSE on Thursday. Since 1 January, the stock has declined 60%. “We expect a deterioration in the asset

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