Bank of Baroda share price target

Analysis of stressed assets clearly suggests that the Bank is approaching the end of recognition of stressed loan cycle, which along with higher PCR clearly indicates sharp moderation in credit cost from FY19 onwards. Further, recently-announced mega recapitalisation scheme is a longterm positive for the Public Sector Banks in general. The Bank's new management is gradually reinstating confidence through major changes in operating structure, which may start yielding desired outcome. As we believe that improved outlook on asset quality and operating performance augur well for the Bank, we maintain our BUY recommendation on the stock...

Maintain BUY with a TP of Rs 202 (1.3x Sept-19 ABV of Rs 156) BOBs 2Q results signify managements focused approach on B/S healing, curtailing asset quality slip-ups and operational improvements. The uptick in growth (domestic loans +14% YoY), coupled with a decline in slippages (~3.61% vs 5.47% ann.), was a pleasant surprise. NIM improvement (2.31%, +20bps QoQ) propelled core earnings to an all-time high Reduction in net stress and sustained CASA traction were additional positives.

Bank of Baroda's (BoB) performance was healthy on the operational front. Loan growth & NIMs improved while asset quality was steady Asset quality was steady QoQ with GNPA ratio falling 24 bps QoQ to 11.16%. Absolute GNPA was largely flattish at | 46307 crore. Fresh slippages were at | 3451 crore vs. | 5200 crore in Q1FY18 The bank's operational performance was above estimates with PPP at | 3042 crore (up 13.1% YoY). However, higher-than-expected provisions led to profits being lower than estimate at | 355 crore....

Maintain BUY with a TP of Rs 206 (1.3x Sept-19ABV of Rs 159). Despite a couple of underwhelming quarters, we persist with our faith in BOB as the future seems bright. Our recent interaction with the BOB mgt indicates (1) Double-digit growth in the domestic book, led by Retail and Corp. segments, (2) Multiple tailwinds for NIM improvement, (3) Confidence on GNPA guidance for FY18E (Rs 465-475bn vs. Rs 462bn in 1QFY18), despite the slip in 1Q, (4) Lower exposures in RBIs 2nd NCLT list (18 a/cs amounting to Rs 45bn), (5) Conservative provisioning despite higher PCR of 66%, (6) Diminishing possibility of consolidation in FY18 due to timeline constraints (possible in FY19) and (7) A book accretive fund raise in the next few qtrs with visibility on growth.

Q1FY18 PAT at Rs 2.0 bn (down 52% YoY) was way below the street and our estimates. Asset quality was a key disappointment, as slippages rose ~30% QoQ at Rs 52 bn and remain elevated. Consequently, headline GNPA rose 94 bps QoQ at 11.4%.

Bank Of Baroda's Asset Quality weakens and Profit Misses Street Estimates. Bank of Baroda reported the net profit of Rs 203.39 crore in the quarter ended June 2017 (Q1FY2018) compared with Rs 154.72 crore in the previous quarter and Rs 423.62 crore in the corresponding quarter last year. The net interest income (NII) of the bank was subdued at 1%, as the bank has showed decline in NIMs to 2.12% in Q1FY2018. The non-interest income improved at better pace of 7% in Q1FY2018 with strong growth in core fee income. With the subdued revenue growth, the bank has showed increase in cost-to-income ratio, while recording 1% decline in the operating profit in Q1FY2018....

ICICI Securities Ltd | Retail Equity Research BoB's operational earnings were a tad above our estimates. However, asset quality saw pressure with slippages rising QoQ Absolute GNPA increased by | 3454 crore QoQ to | 46173 crore (GNPA ratio increased 94 bps QoQ to 11.4%). Fresh slippages remained elevated at | 5200 crore vs. | 4077 crore in Q4FY17. Within slippages, 45% were from the corporate book. In that, two large accounts in electrical (| 1200 crore) & EPC (~| 600 crore) sectors...

Marred by elevated stress on asset quality and higher credit cost, Bank of Baroda (BoB) has posted a muted performance in 1QFY18. Slippages increased by 27.5% QoQ to Rs52bn primarily due to recognition of two large corporate accounts as NPA along with higher slippages from agriculture portfolio due to ongoing loan waiver scheme by different state governments and recognition of NPAs from loan under special RBI moratorium post demonetisation. As a result, provisioning expenses at elevated level of Rs23.7bn (+18.2% YoY & -9.7% QoQ) dragged PAT to...

Maintain BUY with a TP of Rs 201 (1.4x Mar-19 ABV of Rs 144). After kindling rejuvenation hopes over the trailing year, BOB faltered in 1QFY18. Slippages shot up to Rs 52bn (driven by lumpy corporate ACs and the farm loan waiver impact). Net stressed assets rose to 8.3%, even as advances dropped ~2% sequentially. Stable NIM (2.12%, despite higher slippages), superior PCR at ~66.3% (highest in the peer set), low exposure (~Rs 79bn) to IBC accounts, CASA growth (+24% YoY) and controlled opex (+8%) helped save the blushes.

Bank of Baroda reported Operating Profit of Rs. 2648 Cr in Q1 FY 2018 as against Rs. 2,669 Cr in corresponding quarter previous year, a de-growth of 0.8%. The bank reported net profit of Rs 203 crs for the quarter against profit of Rs 424 crs in...