Bank of Baroda, the state-run lender, has garnered bullish sentiments from leading brokerages after unveiling its fourth-quarter results for the fiscal year 2024. The bank reported a standalone net profit of ₹4,886.49 crore for Q4, marking a robust growth of 2.3% from the year-ago period’s ₹4,775.33 crore. Bank of Baroda share price can surge up to 33% from current levels (Rs 255), say brokerages post the bank’s Q4 results.
CITI, among the prominent names, has expressed a bullish outlook on Bank of Baroda, rating it as a “Buy” and setting a Target Price (TP) of Rs 300. The key highlights from CITI’s assessment include a notable expansion in Core Net Interest Margins (NIMs) by 5 basis points quarter-on-quarter (qoq), with reported NIMs benefiting additionally from seasonal recoveries. Moreover, the Net Interest Income (NII) growth at 6% qoq surpassed expectations.
JPM has also voiced optimism, rating Bank of Baroda as “OW” (Overweight) and raising the TP to Rs 340. It commends the bank’s containment of gross and net slippages for FY24 at 1.1% and 0.6%, respectively, anticipating further improvement owing to a reduction in outstanding standard stress book (SMA + Restructured).
Meanwhile, Morgan Stanley (MS) maintains an “EW” (Equal Weight) rating but has raised the TP to Rs 280. The brokerage foresees continued stock recovery driven by relatively better valuation, a strong balance sheet, and profitability.
Kotak Institutional Equity, in alignment with MS, suggests adding Bank of Baroda to portfolios, with a TP of Rs 280. However, it remains cautious, highlighting that the bank is still in the early stages of the credit cycle and refrains from turning negative on potential worsening asset quality trends.
Jefferies rounds up the bullish sentiment with a “Buy” rating and a TP of Rs 310. It notes the bank’s robust loan growth of 13% year-on-year (YoY) but raises a flag regarding future growth prospects as management aims to lower Loan-to-Deposit Ratio (LDR) from the current 80%.
