Bank of Baroda share price up 40% YTD; analysts bullish as Q1 profit jumps 79%, see up to 29% more jump

Bank of Baroda share price rose marginally on Monday after the lender reported a massive 79.4 per cent on-year growth in standalone profit at Rs 2,168 crore for the quarter ended June 2022, despite fall in other income and pre-provision operating profit. Net interest income during the quarter under review grew by 12 per cent to Rs 8,838.4 crore compared to year-ago period, with credit growth at 18 per cent and 10.9 per cent on-year increase in global deposits. So far this year, Bank of Baroda share price has rallied around 40 per cent and analysts remain bullish on the stock, seeing up to 29% further upside, going forward. Bank of Baroda shares were trading at Rs 117 apiece on Monday.

Should you buy, hold or sell Bank of Baroda shares?

Edelweiss: Buy
Target price: Rs 136; Upside: 17.2%

According to analysts at Edelweiss Securities, Bank of Baroda’s Q1 net profit of Rs 2,168 crore beat their estimate of Rs 900 crore due to substantially lower credit cost. The brokerage increased its EPS to factor-in lower credit cost. “We are sharply cutting our credit cost estimates leading to an increase of 20%/9% in EPS for FY23E/FY24E,” it said. While core was mixed in Q1, analysts believe, inexpensive valuation and a strong deposit franchise will be key positive triggers. With cheap valuations and low asset quality risks, Edelweiss maintains a ‘buy’ call on the stock with a revised target price of Rs 136 apiece.

Motilal Oswal: Buy
Target price: Rs 150; Upside: 29.3%

Brokerage firm Motilal Oswal Financial Services, Bank of Baroda reported a broadly steady operating performance, while lower provisions drove net earnings. Business growth stood healthy at 3% QoQ, led by Retail loans, while margin declined slightly. “CASA mix was largely stable, which should shield the rise in deposit cost as interest rates harden. Asset quality improved as slippages moderated, with CE strong at 98%,” it said. The analysts increased their FY23, FY24 earnings estimate by 22% and 11% respectively, factoring in higher NII and lower credit cost. The brokerage maintains a ‘buy’ call on the stock with a target price of Rs 150 per share.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

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