Bank of Baroda share price target

Q1FY26 numbers were decent on low expectations. Net interest income (NII) at Rs. 11,435 crore (above estimates) down by 1% y-o-y/q-o-q each.

Q4FY25 numbers were weak as core operating performance was weak while asset quality trends improved mainly led by higher write off. Net interest income (NII) at Rs. 11,020 crore (below estimates) down by 7% y-o-y/ 3% q-o-q.

Bank of Baroda (BoB) reported healthy credit growth at 13% YoY. However, the sharp and constant decline in NIM (by 8bps QoQ) to 2.86% (due to lower loan yields) and the higher provisions were the upsets during 4Q.

We maintain our BUY recommendation on the stock at reasonable valuations.

BOB saw a weak quarter with core PPoP miss of 7.3% as NII/NIM was 6.1% below PLe. Margins remain under pressure; while reported domestic NIM fell by 9bps QoQ, full year NIM for FY25 fell by 16bps YoY to 3.02% due to 24bps increase in deposit cost and 13bps fall in loan yields. In our view, the fall in yields was likely due to preference for growth over profitability while increase in funding cost was driven by reliance on higher cost bulk deposits in FY25. Bank expects NIM to remain under pressure in Q1FY26, post which it may improve....

Decent core operating performance and modest provisioning (~40bps) led to the Bank of Baroda’s strong profitability in Q3, its RoA coming at 1.15%. Asset quality improved.

BOB reported a mixed performance in Q3FY25 as core operating performance was weak while asset quality trends were stable. Net interest income (NII) at Rs. 11,417 crore (below estimates) grew by 3% y-o-y/ down 2% q-o-q.

We maintain our BUY recommendation on the stock on attractive valuations

Bank of Baroda (BoB) reported strong PAT beat at Rs52bn/RoA of 1.3%, mainly due to higher other income (led by treasury gains and recovery in TWO accounts), and partly offset by higher provisions (including contingent provisions).

Earnings significantly above estimates, grew by 23% y-o-y mainly driven by higher recoveries from written off accounts leading to higher RoA at 1.3%. Sustainable RoA trajectory remains at 1-1.1% for the bank.

We recommend a BUY on the stock with a target price of Rs 275/share, implying an upside of 10% from the CMP.

Bank of Baroda (BOB) posted ~17% CAGR in loan growth over FY22-FY24 as it deployed excess liquidity on the balance sheet. Its CD ratio, thus, increased ~600bp over the past two years to 80.3%.

We maintain our BUY recommendation on the stock.

Earnings grew 10% y-o-y mainly driven by a 48% y-o-y fall in provisions, but core operational performance was weak. Overall asset quality was broadly stable.

We maintain our BUY recommendation on the stock.