Bandhan's operating metrics justify valuation; Q1 net profit up 48%

Its net interest income (NII) or a difference between interest earned and expensed surged 40 per cent over a year to Rs 10.4 billion

The Bandhan Bank's stock hit a new high of Rs 607.5 on the BSE after the bank reported strong June quarter results on Wednesday. The stock closed with a gain of 6.8 per cent at Rs 600.1. 

With this, the bank's current valuation is 5.3 times its FY20 estimated book value, highest in the banking industry. Yet, analysts believe it deserves such valuations. "With strong operating performance, earnings growth potential and robust capital base (capital adequacy at 32.6 per cent in the first quarter or Q1), the stock deserves premium valuation, compared to other private banks," says Manish Oswal, analyst