Bandhan Bank shares tumble 18% post Q1 results; here’s why the stock crashed despite healthy earnings

Bandhan Bank shares tumbled 18% during the early market hours on Wednesday, July 22, as stock market investors focused on the company management’s conservative guidance and margin concerns despite registering healthy growth in the April to June quarter earnings for the fiscal year 2026-27.

Shares of Bandhan Bank crashed 18% to their intraday low level of ₹171.56 apiece on Wednesday’s market, compared to ₹208.83 at the previous stock market close, according to NSE data.

After the stock dropped 10%, the company shares entered NSE’s cooling-off period, after which the data showed that the lender continued its decline on the stock exchange as investors reacted to the conservative outlook.

At 11:22 am, Bandhan Bank shares were trading 15.29% lower at ₹176.90 on July 22.

Why did Bandhan Bank shares crash today?

In the institutional lender’s earnings call, Bandhan Bank’s management decided to cut its exit return on assets (RoA) guidance down by 20 basis points to a range of 1.2% to 1.4%, from its earlier 1.6% to 1.8% levels.

Despite a healthy Q1 earnings show, the bank stock crashed on Wednesday’s market as investors reacted to the conservative performance rather than the year-on-year growth of the company's profits in the June quarter.

RoA for a bank is a metric that measures profitability based on how much the lender is able to convert its assets into net profits for a particular period. A reduction in RoA guidance also signals margin pressure ahead.

On the margin front, Bandhan Bank’s management also highlighted that the lender’s margins are expected to remain under pressure from the higher cost of deposits.

Reports suggest that the management also said that deposit pricing, an uncertain global environment, the yearly monsoon and higher technology costs remain some of the key risks for the bank.

What do analysts say?

Analysts from leading investment firm JP Morgan said that the overall 40 basis point RoA guidance impact is on account of tighter liquidity, elevated funding costs, and rising technology-related costs.

The experts further noted that 30 basis points out of the total is an impact due to the moderation of the net interest margin (NIM) outlook, which has been cut to 6.2% after the Q1 results, from earlier 6.5% levels. The remaining 10 basis point impact is from the technology costs alone.

How did the bank perform in Q1 results?

On Tuesday (July 21) evening, Bandhan Bank posted a 35% year-on-year growth in net profit after tax (PAT) at ₹501.66 crore in the April to June quarter of the financial year 2026-27, compared with ₹371.96 crore in the same period a year earlier.

NSE filings showed that the bank’s interest income advanced 2.8% to ₹5,630.55 crore in the first quarter of the current fiscal year, compared to ₹5,475.61 crore in the same quarter of the previous year.

The net profits for the June quarter were further aided by the reduction in provision for bad loans in the period. A bank is likely to reduce its provision for bad loans if the firm estimates the non-performing assets (NPA) to reduce in the upcoming period.

Bandhan Bank’s provisions declined 40% YoY to ₹682.58 crore in the April to June quarter, compared with ₹1,146.90 crore in the corresponding quarter of the previous financial year, as per the financial statements.

Asset quality improves

Bandhan Bank’s gross non-performing assets (NPA) percentage declined by 181 basis points to 3.15% in the June quarter, compared to 4.96% in the same quarter of the previous financial year.

The gross NPAs of the bank dropped to ₹4,880.94 crore in the Q1 earnings report, from ₹6,622.63 crore in the corresponding quarter of the previous fiscal year, according to the financial statements.

NPAs are loans which have already been given out to the borrowers, and they have failed to repay the same for a period of 90 days, after which these allocations are classified as bad loans.

Bandhan Bank share price history

Bandhan Bank shares have lost more than 41% of their value in the last five years, have dropped 18% in the last three years, and are down nearly 1% in the past one year period, according to NSE data.

In contrast, the company’s stock has delivered more than 24% returns to investors on a year-to-date (YTD) basis.

However, Bandhan Bank shares have lost 14% in the last one month and were trading more than 17% lower in the last five trading sessions.

The institutional lender’s market capitalisation (m-cap) was at ₹28,596 crore as of the trading session on Wednesday, July 22, 2026.