Bandhan Bank share rises as Q2 profit jumps five-fold to Rs 622 crore

Bandhan Bank reported a net profit of about Rs 622 crore for the July to September 2026 quarter (Q2 of the financial year 2026-27), more than five times the Rs 112 crore it earned a year earlier, as provisions for bad loans fell and asset quality improved. The lender announced the results on Wednesday, October 28, 2026. Its shares rose about 2-3% that day on the NSE, according to market reports, while brokerages remained divided on the stock.

The main story of this quarter is provisions. A provision is money a bank sets aside from its profit to cover loans it expects may not be repaid. When provisions are high, profits fall even if the bank's core lending business is healthy, and when they fall, profits can jump sharply.

This quarter shows that pressure on Bandhan easing. Provisions fell by more than a third from a year earlier and the credit cost, which measures provisions as a share of loans, nearly halved. That alone explains much of the jump in profit. At the same time, the bank's gross NPA ratio, the share of loans that have stopped being repaid for 90 days or more, dropped from 5% to 3.1%. The net interest margin, which shows how much the bank earns on its loans after paying for deposits, also improved.

Why are brokerages still cautious? A five-fold rise is partly a "base effect": last year's profit of Rs 112 crore was unusually low because of heavy provisions, so the percentage jump looks very large. According to reports on brokerage notes, some analysts want to see whether loan growth and asset quality stay steady over more quarters before turning positive, which is why several kept neutral ratings while one cut its target price. Axis Securities, by contrast, said the results beat its estimates on both pre-provision operating profit and net profit and kept its "buy" call.

For readers who follow bank stocks, the result is a reminder to look past the headline percentage. A sharp rise from a weak base is good news, but the trend in bad loans and provisions over several quarters tells more about a lender's health. This article is not investment advice.

Short-term: The stock reacted positively, but with analysts split, further moves are likely to depend on the next updates on loan collections and asset quality.

Long-term: If gross NPA keeps falling and credit costs stay low, Bandhan's profit could settle at a higher level. A fresh rise in loan defaults, however, would push provisions up again.

Who is affected: Bandhan Bank's shareholders and depositors; its borrowers; and investors tracking small-loan lenders and bank stocks.

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