Bank Of Baroda Share Price Jumps Most Since June As Q2 Net Profit Beats Estimates

Bank Of Baroda's share price saw its best session since June 6 on Monday, after the lender's September quarter net profit came in at Rs 5,238 crore, beating analysts expectations of Rs 4,452 crore.

The bank's net interest income rose 7% year-on-year to Rs 11,622 crore. Nuvama slightly raised its target price from Rs 280 to Rs 290, while maintaining 'buy' rating, as it finds valuations attractive for return on equity of 15-16%. Steady asset quality performance in a challenging environment is also comforting, it said. The target price implies an upside of 16.9%.

Emkay Research said Bank of Baroda reported strong PAT beat at Rs 5,200 crore/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.

However, net interest margin shrunk by 8 bps QoQ to 3.1% due to lower yields and headline gross non performing assets declined by 38 bps QoQ to 2.5% in absence of lumpy NPAs, similar to a few peers, the brokerage noted.

"The management has revised its guidance for FY25 with credit growth of ~11-13% and deposit growth of 9-11%, while NIMs likely to remain range-bound at 3.15% +/-5bps," the brokerage said, while retaining 'buy'. Emkay Research kept the target price unchanged at Rs 325, implying 35.6% upside.

Bank of Baroda's share price rose as much as 5.2% to Rs 252 apiece as of 10:30 a.m., compared to a 0.9% advance in the NSE Nifty 50.

The stock has risen 9% on a year-to-date basis and 28.5% in the last 12 months. Total traded volume so far in the day stood at 1.03 times its 30-day average. The relative strength index was at 56.9.

Of the 35 analysts tracking the company, 27 maintain a 'buy' rating, seven recommend a 'hold' and one suggests 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 16.3%.