Bank of Baroda share price rose nearly 1% to Rs 193.20 today after the bank’s net profit jumped 87.7% to Rs 4,070 crore on-year in Q1FY24, compared to Rs 2,168 crore in the year-ago period. The net interest income (NII) grew by 24% on-year to Rs 10,997 crore in the April-June quarter while the global net interest margin (NIM) for the said quarter stood at 3.27%, up 25 bps on-year. The domestic NIM rose 34 bps on-year to 3.41% in Q1. Brokerages have mostly recommended a ‘Buy’ rating on the stock. BoB shares have fallen over 8% in the last one month and have gained 62% in the past one year.
Should you buy, sell or hold Bank of Baroda stock?
JM Financial: Buy – Target Price: Rs 235
“We build in an avg. RoA/RoE of 1.01%/16% by FY25E on the back of a) higher expected credit growth b) re-balancing of portfolio to 65:35 in favour of non-corporate book and c) steady asset quality. We maintain a BUY with a revised target price of Rs 235, valuing BOB at 1.03x FY25 adj. BVPS.”
Nuvama: Buy – Target Price: Rs 220
“Even with the sharp miss on NII, BoB delivered core RoA of 1% (reported RoA of 1.1%) – over the last four quarters, the bank has sustained RoA at 1% or above. BoB has made more progress than peers in adopting practices of private banks. Our target price stands unchanged at Rs 220; 0.9x BV FY25E. We have tweaked our earnings.”
Prabhudas Lilladher: Buy – Target Price: Rs 235
“While the bank would like to maintain NIM for FY24 at FY23 levels, we are factoring an 8bps decline in NIM to 3.08%. MCLR repricing would be a key to upgrade in NIM. Basis Q1’24 results, SBI delivered better NII/NIM and in near term SBI could outperform BOB on NIM given higher CASA and unsecured share. We slightly tweak our multiple from 1.15x to 1.11x but keep target price unchanged at Rs 235. Retain ‘BUY’.”