Bank of Baroda share price target

ICICI Securities Ltd | Retail Equity Research We met the management of Bank of Baroda (BoB) to get an insight into the current scenario on asset quality & future plans. Currently, banking system is facing challenge primarily on two fronts growth & asset quality. Led by slowdown in credit demand from corporate, advances book stayed flat in FY17. However, management has guided for credit offtake at 8-10% in FY18E, led by retail and mid-corporate segment though credit demand from large corporate is seen staying muted....

Though we expect consolidation in the loan book to continue for the next couple of quarters, we continue to like the bank owing to its better capital position, able management and higher provision coverage ratio. Further, gradual improvement in asset quality will lead to better profitability. As a result, we expect the RoA and RoE to improve to 0.5% and 8%, respectively by FY19E. Hence, we continue to maintain BUY rating with a revised upwards TP of Rs200 and value...

NII increased to Rs. 3581.86 Cr in Q4FY17 compared to Rs. 3134.36 Cr in Q3FY17.

Asset Quality & Operating Performance Continue to Improve Bank of Baroda (BoB) has reported substantially improved performance in 4QFY17. It's operating profit increased by 17.4% YoY & 16.4% QoQ to Rs30.2bn led by 7.6% YoY & 14.3% QoQ growth in NII to Rs35.8bn along with healthy 38.8% YoY and 49.4% QoQ growth in core fee income. The Bank has delivered improved performance on all major asset quality parameters with slippages of Rs40.7bn in 4QFY17 vs. Rs41.4bn in 3QFY17 & Rs59.3bn in 4QFY16 along with improvement in recovery (Rs15.4bn in 40QFY17 vs. Rs13.5bn in 3QFY17 & Rs14.3bn in 4QFY16). Its loan book also...

ICICI Securities Ltd | Retail Equity Research The bank reported a healthy core operational performance Asset quality stress continued but owing to healthy recoveries and upgrades absolute GNPA was flat QoQ. Fresh slippages were at | 4077 crore vs. | 4135 crore in Q3FY17. Absolute GNPA was stable QoQ at | 42719 crore (GNPA ratio reduced by 94 bps QoQ to 10.46%). The standard RA fell to | 10785 crore from | 14059 crore, forming ~2.81% of total loans. Total stressed assets (GNPA + RA)...

BOBs 4Q results vindicate our thesis of steady mend. As expected, operational performance witnessed improvement, with sequential loan growth ( 9.5%), NIM expansion (despite interest reversals on SDR and S4A) and strong core PPOP growth ( 33% QoQ).

Bank of Baroda (BoB), established in 1908, is amongst the oldest commercial banks in India with a substantial footprint in the domestic and international markets. BoB has a wide presence overseas with almost one-third of the total business, coming from its international business. Bank of Baroda has a network of 5,351 domestic branches, 107 overseas...

BUY Bank of Baroda at CMP Rs. 175 and add on dips to Rs. 175-160 for the Target of Rs. 220

With better NIM performance and higher treasury gains, the management expects the healthy PPOP performance to continue in 4Q and FY18. The bank plans to monetise its non-core investments in NSE and UTI MF via an IPO in FY18. Further, it also plans to unlock value in subsidiaries. We have not factored these one-off gains in our PPOP estimates.