Bandhan Bank shares rise to a high record of Rs. 706.95, imparting it a market cap of Rs. 84,325.35 crores. Yes Bank shares trading at Rs. 365.70 on BSE, was valued Rs. 84,262.14 crores.

On Wednesday, Kolkata-based Bandhan Bank Ltd beats Mumbai based Yes Bank and became the 7th most valued listed lender. With a market capitalization of Rs. 84,325.35 crores,shares record high and raised to  Rs. 706.95 after moving 1% higher on BSE.Yes, Bank shares down with 0.6% from its previous close.

HDFC Bank Ltd remained country’s most valuable bank with a market cap of Rs. 5.71 trillion followed by State Bank of India and Kotak Mahindra Bank Ltd with the market cap of Rs. 2.67 trillion and Rs. 2.46 trillion respectively.

Improved asset quality and better than expected earning have helped Bandhan Bank in its stock. It has a gross bad loan ratio of 1.26%, lowest among for Indian lenders.

The stock gained 84% since listing on 27 March while the S&P Bankex, the broader gauge of banking stocks, rose 13.55% during the same period.

A return on asset nearby 3.5% and a net interest margin of over 10%, among highest for Indian lenders, too have helped. So despite trading at relatively high valuations of close to 5.9 times its expected book value for this fiscal, the stock has found favor with investors.

Among the analysts who are covering the Bandhan Bank stock, 5 have a “buy” rating, 1 has a “hold” rating. No brokerage has the sell rating on the stock.

Among the analysts covering Yes Bank stock, 45 have a “buy” rating, 5 have a “hold” rating, while 3 have a “sell” rating.

While Yes Bank continued to deliver a consistent performance on all major operational parameters for June quarter. On 26 July, it reported a profit which grew by 30.5% to Rs. 1,260 crores while net interest income rose 22.7% to Rs. 2,220 crores. Gross non-performing assets (NPAs) as a percentage of total loans stood at 1.31% in the quarter from 0.97% a year ago.

ICICI Direct Research noted to its investors, “Asset quality has stayed largely resilient for the bank across cycles but recently saw large pressure. Asset growth has remained strong. However, performance on margins and asset quality would be the key factor to watch, going ahead”.

Large NPA related divergence observed by RBI in the last two years keeps us alert on aggressive credit growth registered by the bank recently. Among the analysts covering Yes Bank stock, 45 have a “buy” rating, 5 have a “hold” rating, while 3 have a “sell” rating.

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