Bank of Baroda Q1 Results Review - Guides To Stay On The Course Of Structural Improvement: Yes Securities

Yes Securities Report

We maintain ‘Buy’ on Bank of Baroda with a revised price target of Rs 360: We value the bank at 1.2 times FY26 price/book value for an FY25E/26E return on equity profile of 15.8/16.0%. We assign a value of Rs 20.7 per share to the subsidiaries, based on SOTP.

Asset quality - There was a sequential fall in slippages and management has improved its credit cost guidance:

Gross non-performing asset additions amounted to Rs 30.18 billion for Q1 FY25, translating to an annualized slippage ratio of 1.1%. The bank has maintained its guidance for a slippage ratio of 1-1.25% for FY25. Recoveries and upgrades amounted to Rs 16.57 billion for Q1 FY25 and the recovery from TWO was at Rs 5.54 billion for the quarter.

The bank expects a total recovery of Rs 100 billion including NPA recoveries and recoveries from written-off accounts in FY25. Provisions were Rs 10.11 billion, down by -22.4% QoQ, translating to calculated annualised credit cost of 38bps.

The provision was lower sequentially as the bank has received Rs 3 billion on loans which were having government guarantee. The bank has reduced its credit cost guidance from 1% to 0.75% in FY25.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit. 

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.