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Bandhan Bank Limited witnessed a massive short-covering rally in Wednesday’s morning session, with the stock jumping over 12%. The Kolkata-based lender became one of the top gainers in the Nifty Bank index, reclaiming the critical ₹200 psychological mark on the back of high trading volumes.

As of 11:21 AM IST, Bandhan Bank (EQ) was trading at ₹200.25, a jump of ₹21.60 or 12.09%. The stock opened at ₹186.01 and scaled an intraday high of ₹200.89.

The stock’s Volume Weighted Average Price (VWAP) stood at ₹196.04, indicating sustained buying interest throughout the first half of the session. This rally follows a previous close of ₹178.65, marking a significant breakout for the counter.

Asset Quality Turnaround Fuels Rally

The primary catalyst for the surge was the bank’s Fourth Quarter (Q4) earnings report. Bandhan Bank reported a sharp decline in its Gross Non-Performing Assets (GNPA) and Net NPA ratios, signaling that the worst of its stress cycle may be over. Net profit for the quarter saw a double-digit jump, supported by a healthy rise in Net Interest Income (NII). The bank's focus on diversifying its portfolio beyond micro-credit into secured retail loans has started reflecting in its improved margins.

What Brokerages Are Saying

The quarter has prompted several brokerages to turn optimistic on the stock:

• CLSA: Upgraded the stock to a ‘Buy’ with a revised target, noting that the credit cost trajectory is trending lower than anticipated.
• ICICI Securities: Highlighted the robust deposit growth of over 20% year-on-year, which provides the bank with a stable liquidity base for future expansion.
• Motilal Oswal: Suggested that while micro-finance risks remain, the bank’s current valuation offers an attractive entry point given the sharp recovery in its return on assets (RoA).

Bandhan Bank’s performance provided a boost to the broader banking sector. Analysts believe the successful transition to a more diversified loan book will be the key driver for the stock in FY27. With the asset quality overhang clearing, the bank is now well-positioned to capitalize on the rising credit demand in rural and semi-urban markets.