Shares of Bank of Baroda surged over 3% to trade around ₹288 in Monday’s session after Nomura upgraded the stock to Buy from Neutral and raised its price target sharply to ₹320 from ₹240, citing the lender’s strong Q2 FY26 performance and improved earnings outlook.
Nomura said Bank of Baroda delivered a strong quarter, led by core pre-provision operating profit of ₹62.5 billion, up 9% QoQ and beating estimates by 8%. The upside was supported by net interest margin expansion of 5 bps QoQ, stable core fee income, and disciplined cost control.
The bank’s growth metrics also remained healthy, with loan growth at 6% QoQ and 12% YoY, while deposits rose 5% QoQ and 10% YoY. The credit-deposit ratio improved to 83.9%, rising by 124 basis points sequentially — reflecting strong credit demand and balance-sheet momentum.
To prepare for the transition to the expected-credit-loss framework, Bank of Baroda created ₹4 billion in floating provisions in Q2, taking the total buffer to ₹10 billion. The bank expects only a 75-basis-point impact on capital ratios, spread over five years.
Nomura has now raised its EPS estimates by 6% for FY26 and 9-11% for FY27-28, forecasting ~1% RoA and 13.7% RoE over FY26-28 supported by higher net interest income and lower credit costs.
At 9:49 AM, Bank of Baroda shares were trading 3.66% higher at ₹288.60, up ₹10.20 from the previous close.
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