Bank Of Baroda Shares Hit Over One-Month Low As Advances Decline QoQ
Nomura Research expects the net interest margins to be largely stable sequentially.
Shares of Bank of Baroda fell over 4% on Monday to their lowest in over a month after the lender reported a sequential decline in its advances for the first quarter of the current financial year.
The public sector bank's domestic advances rose 8.51% on a yearly basis to Rs 8.81 lakh crore in the April–June quarter. Gross loans declined by 2% sequentially versus a growth of 3.9% in the last quarter, led by fall in both the domestic and overseas segments, according to provisional figures released by the bank on Friday.
The bank's total advances declined 1.7% from its previous quarter. Bank of Baroda's global advances rose 8.14% to Rs 10.7 lakh crore in the first quarter, in comparison to Rs 9.9 lakh crore in the same period last year.
The directors of the bank also approved raising close to Rs 7,500 crore by issuing debt securities.
Based on the Q1 update, Nomura Research expects the net interest margins to be largely stable sequentially. Delivery on asset quality will also be a key monitorable, it said in a note.
Nomura has a 'buy' rating on the stock with a target price of Rs 320 per shares, an upside of 17% from the previous close.
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On the NSE, Bank of Baroda's stock fell as much as 4.3% in early trade to Rs 261.8 apiece, lowest since June 4. It was trading 2.79% lower at Rs 266.15 apiece, compared to a 0.08% decline in the benchmark Nifty 50 at 10:05 a.m.
The share price has risen 30.8% in the last 12 months and 15% on a year-to-date basis. The total traded volume so far in the day stood at 1.9 times its 30-day average. The relative strength index was at 43.
Twenty-seven out of the 36 analysts tracking the company have a 'buy' rating on the stock, eight recommend a 'hold' and one suggests a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 30%.
