Shares of Bank of Baroda (BoB) fell 4.81% to ₹211.70 as of 10:19 AM, following the release of its Q3 FY25 earnings. The bank reported a 5.6% year-on-year (YoY) rise in net profit to ₹4,837 crore, compared to ₹4,579 crore in Q3 FY24, driven by higher interest income and improved operational performance. However, sequentially, net profit declined 7.6% from ₹5,238 crore in Q2 FY25, which weighed on investor sentiment.
Net interest income and key metrics
The bank’s net interest income (NII) grew 2.8% YoY to ₹11,417 crore, compared to ₹11,101 crore in the same period last year. However, sequentially, NII declined 1.76% from ₹11,622 crore in Q2 FY25, reflecting pressure on net interest margins (NIMs). Operating profit increased to ₹7,664 crore, up from ₹7,015 crore YoY, indicating operational efficiency despite sequential challenges.
Asset quality improvements
BoB’s gross non-performing asset (NPA) ratio improved to 2.43% in Q3 FY25, compared to 3.08% in Q3 FY24, while net NPAs fell to 0.59% from 0.70% in the previous year’s corresponding quarter.
Provisions and capital adequacy
The bank’s provisions (excluding tax) rose to ₹1,082 crore in Q3 FY25, up from ₹666 crore in Q3 FY24, reflecting a more cautious stance on asset quality. The capital adequacy ratio declined to 14.72%, down from 15.96% YoY, indicating a slight deterioration in capital buffers.
Brokerage update
HSBC maintained a ‘Hold’ rating on Bank of Baroda but cut its target price to ₹250 per share. The brokerage noted that core fee income growth and a quarter-on-quarter improvement in credit costs helped offset pressure on NIMs. HSBC adjusted its EPS estimates by +4% for FY25 but cut estimates by 2.6% and 3.6% for FY26 and FY27, reflecting potential continued pressure on margins.
Stock performance and key metrics
As of 10:19 AM, Bank of Baroda’s stock traded at ₹211.70, down 4.81%, with an intraday high of ₹218.50 and a low of ₹211.05. The stock’s 52-week range stands at ₹211.05 – ₹299.70. The market capitalization is ₹1.12 trillion, with a P/E ratio of 5.62 and a dividend yield of 3.50%.
Despite YoY profit growth and improving asset quality, the sequential decline in net profit and NII, along with lower capital adequacy, likely dampened investor sentiment, leading to the stock decline. HSBC’s target price cut to ₹250 suggests caution on margin pressures going forward.
Disclaimer
The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions.
