Morgan Stanley has maintained its underweight rating on Bank of Baroda with a target price of ₹235 per share, implying a potential downside of about 5.5% from the current market price of ₹248.70.
At its recent financial seminar, management guided for deposit growth of 9–11% and loan growth of 10–12% in FY26, led mainly by the retail and SME segments. However, net interest margins (NIMs) are expected to decline by 7–8 basis points in Q2FY26 before improving, supported by the CRR cut and lagged deposit repricing.
The bank reiterated its full-year NIM guidance at 2.9% (±5 bps). It also maintained that slippages and credit costs are trending better than guidance, with slippages expected to outperform the 1.0–1.2% range and credit costs contained at around 75 bps.
Morgan Stanley noted that despite stable asset quality trends, near-term pressure on margins underpins its cautious stance on the stock.
Disclaimer: The views and investment recommendations expressed are those of Morgan Stanley. These do not represent the views of this publication and should not be considered as investment advice. Investors are advised to consult their financial advisors before making any investment decisions.
