My view: Clear derating of business perception, all the good things are factored in initially and PB is flying high and now its just getting back more relatable valuation. I will give some parallel with Ujjivan bank which went on similar path during covid. Ujjivan has higher share of microfinance. They also crossed GNPA of 10+ %, they went ahead and provided for almost entire GNPA book and now they have nearly nil NNPA and credit cost. This clearly marks the base point for Ujjivan and it started recovering both from stock price and profitability perspective. But in case of Bandhan, even after providing for large chunk of GNPA, still they are guiding for 3% credit cost. Management trying their best, but there is no clear visibility in turnaround
On pure stock price, Bandhan is it still trading at PB of 2 which is okaish valuation and not too cheap. Even during deepest covid fear of Apr, May 2022, it is trading at 2. This also does not give deep value like RBL,UJJIVAN, Karnataka, South Indian, KVB, which everyone entered in recent times and made money. After seeing what this bank has gone through and still having its effects of covid, when every other bank back to their normal days, why would anyone value this at PB of 4. This may keep on having sideward movement for sometime.
This will definitely come back, but we need to wait little longer, but not sure whether market gives similiar premium valuation. What i think is, gone are those days, where Bandhan commands premium valuation due to growth rate, if we see other premium commanding banks like HDFC, ICICI, Kotak, AU, on how they navigated covid. Now people have seen what will happen to Bandhan when some unforeseen things happen.
DISC: No investment, just tracking as part of banking sector.