- Bank of Baroda shares gained over 2% in early trade on Monday following the announcement of its Q4 results.
- The state-run lender reported a steady quarter with its net profit and net interest income (NII) both rising 2.3% year-on-year (YoY).
- Analysts have maintained their positive view on Bank of Baroda after its Q4 results were largely in-line with estimates.
Bank of Baroda’s Q4 results spark a positive response from investors and analysts, driving a 2% rise in share prices.
Bank of Baroda Q4 Results Overview
Bank of Baroda reported an overall steady quarter with its net profit and net interest income (NII) both rising 2.3% year-on-year (YoY). The bank’s Global Net Interest Margin (NIM) improved by 17 basis points (bps) sequentially to 3.27% in Q4FY24. The bank’s provisions were high as it provided for its aviation exposure. Loan growth was healthy at 15% YoY and the bank expects loan growth of 12-14% in FY25. Deposit growth was also strong, while the CASA mix improved.
Analysts’ Take on Bank of Baroda’s Performance
Analysts have maintained their positive view on Bank of Baroda after its Q4 results were largely in-line with estimates. Brokerages such as Motilal Oswal Financial Services, Nuvama Institutional Equities, and Antique Stock Broking have shared their views on the bank’s performance and future prospects.
Motilal Oswal Financial Services’ Perspective
Motilal Oswal raised its FY25 and FY26 earnings per share (EPS) estimates by 1.9% and 2.8% to account for stable margin and contained provisions. It estimates FY26 RoA and RoE of 1.22% and 17.3%. The brokerage reiterated its ‘Buy’ rating on the stock with a target price of ₹300 per share.
Nuvama Institutional Equities’ View
Nuvama Equities noted that there was an unexpected rise in staff cost, whereas the Street expected some decline as the wage hike was settled at 17% versus BoB’s assumption of 18%. It tweaked its earnings estimates and retained a ‘Hold’ rating with Bank of Baroda share price target of ₹255 apiece.
Antique Stock Broking’s Analysis
Antique Stock Broking mentioned that a favorable credit cycle has helped Bank of Baroda improve ROA and expects it to stay around 1.1% and RoE to be 17% over FY25 and FY26. However, it believes that for a stronger re-rating core performance needs to improve which would test growth and NIM dynamics. The brokerage kept its earnings estimate for FY25 and FY26 unchanged and expects Bank of Baroda to report a RoA of 1.1% and RoE of 17% over FY25 and FY26. It maintained a ‘Buy’ call on the Bank of Baroda shares with an unchanged target price of ₹290.
Conclusion
Bank of Baroda’s Q4 results have been well-received by the market, with shares gaining over 2% in early trade. The bank’s performance has been largely in line with estimates, leading to positive views from analysts. However, the future outlook will depend on the bank’s ability to maintain its growth and improve its core performance.
