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Business Standard
3 days ago
- Business
- Business Standard
Bank of Baroda stock volatile after mixed Q1 show; analysts decode numbers
Shares of Bank of Baroda recouped losses after it fell over 2 per cent on Monday morning deals as analysts termed the lender's first quarter performance as a mixed bag, with a modest growth in net profit. The public-sector lender's stock fell as much as 2.33 per cent during the day to ₹237.7 per share, the biggest intraday rise since June 19 this year. However, the stock pared losses to trade 0.3 per cent higher at ₹244.3 apiece, compared to a 0.02 per cent decline in Nifty 50 as of 11:00 AM. Shares of the company have been in a range-bound pattern since June. The counter has risen 1.5 per cent this year, compared to a 5 per cent advance in the benchmark Nifty 50. Bank of Baroda has a total market capitalisation of ₹1.26 trillion. Bank of Baroda Q1 results The lender's net profit grew 1.9 per cent year-on-year (Y-o-Y) to ₹4,541 crore in the first quarter of 2025-26 (Q1FY26), aided by treasury income, amid pressure on net interest margin. Net interest income (NII) -- the difference between interest earned and interest expended -- fell 1.4 per cent Y-o-Y to ₹11,435 crore. Net interest margin (NIM) from domestic operations fell to 2.91 per cent in Q1FY26, down from the 3.18 per cent in Q1FY25. BoB reported 12.6 per cent Y-o-Y credit growth in overall advances to ₹12.07 trillion. The domestic book grew by 12.4 per cent. While retail advances increased 17.5 per cent, corporate loans saw 4.2 per cent Y-o-Y growth in Q1FY26. Home loans grew by 16.5 per cent. Bank of Baroda asset quality The asset quality profile improved with gross non-performing assets (NPAs) declining to 2.28 per cent from 2.88 per cent a year ago. The net NPAs fell to 0.60 per cent from 0.69 a year ago. The provision coverage ratio, including those for write-offs, stood at 93.18 per cent in June 2025. Lender's capital adequacy ratio stood at 17.19 per cent with the common equity tier I (CET-1) of 17.61 per cent. Analysts on Bank of Baroda Q1 The lender reported a mixed performance in Q1FY26, marked by slower loan growth, higher slippages, and a relatively resilient NIM, Nuvama Institutional Equities said. While BoB's international loan quality remains more volatile than peers, overseas loan growth continues to outpace domestic, Nuvama said. NIM resilience was aided by slower marginal cost of funds-based lending rate (MCLR) cuts and repricing of bulk deposits, despite having a similar external benchmark lending rate (EBLR) mix of 48 per cent as peers. However, Nuvama anticipates a sharper NIM decline for BoB in the coming quarters. Nuvama raised its target price to ₹280 (from ₹260), and maintained its rating at 'Buy'. The near-term pressure on NIMs is expected to continue before a potential recovery in the second half of the financial year, Axis Securities said. A sharper-than-expected contraction in NIMs could pose risks to the bank's ability to deliver a 1 per cent return on assets (RoA), it said The bank is actively working to strengthen its fee income profile, while operating expense growth is expected to remain controlled and slightly below business growth, Axis said. "With no major asset quality concerns on the horizon, credit costs are likely to stay contained, it added. ALSO READ: Analysts at Antique Stock Broking said that the bank delivered a mixed performance, with RoA supported by higher non-core income and a relatively smaller contraction in NIM compared to peers. However, elevated credit costs and higher slippages were notable concerns, it said. Bank of Baroda has consistently maintained RoA above 1 per cent for the past 12 quarters, and this trend is expected to continue, Antique said. The stock appears reasonably priced, with the brokerage maintaining its 'Buy' rating.
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Business Standard
4 days ago
- Business
- Business Standard
Bank of Baroda stock fluctuates after mixed Q1 show; hold or exit?
Shares of Bank of Baroda recouped losses after it fell over 2 per cent on Monday morning deals as analysts termed the lender's first quarter performance as a mixed bag, with a modest growth in net profit. The public-sector lender's stock fell as much as 2.33 per cent during the day to ₹237.7 per share, the biggest intraday rise since June 19 this year. However, the stock pared losses to trade 0.3 per cent higher at ₹244.3 apiece, compared to a 0.02 per cent decline in Nifty 50 as of 11:00 AM. Shares of the company have been in a range-bound pattern since June. The counter has risen 1.5 per cent this year, compared to a 5 per cent advance in the benchmark Nifty 50. Bank of Baroda has a total market capitalisation of ₹1.26 trillion. Bank of Baroda Q1 results The lender's net profit grew 1.9 per cent year-on-year (Y-o-Y) to ₹4,541 crore in the first quarter of 2025-26 (Q1FY26), aided by treasury income, amid pressure on net interest margin. Net interest income (NII) -- the difference between interest earned and interest expended -- fell 1.4 per cent Y-o-Y to ₹11,435 crore. Net interest margin (NIM) from domestic operations fell to 2.91 per cent in Q1FY26, down from the 3.18 per cent in Q1FY25. BoB reported 12.6 per cent Y-o-Y credit growth in overall advances to ₹12.07 trillion. The domestic book grew by 12.4 per cent. While retail advances increased 17.5 per cent, corporate loans saw 4.2 per cent Y-o-Y growth in Q1FY26. Home loans grew by 16.5 per cent. Bank of Baroda asset quality The asset quality profile improved with gross non-performing assets (NPAs) declining to 2.28 per cent from 2.88 per cent a year ago. The net NPAs fell to 0.60 per cent from 0.69 a year ago. The provision coverage ratio, including those for write-offs, stood at 93.18 per cent in June 2025. Lender's capital adequacy ratio stood at 17.19 per cent with the common equity tier I (CET-1) of 17.61 per cent. Analysts on Bank of Baroda Q1 The lender reported a mixed performance in Q1FY26, marked by slower loan growth, higher slippages, and a relatively resilient NIM, Nuvama Institutional Equities said. While BoB's international loan quality remains more volatile than peers, overseas loan growth continues to outpace domestic, Nuvama said. NIM resilience was aided by slower marginal cost of funds-based lending rate (MCLR) cuts and repricing of bulk deposits, despite having a similar external benchmark lending rate (EBLR) mix of 48 per cent as peers. However, Nuvama anticipates a sharper NIM decline for BoB in the coming quarters. Nuvama raised its target price to ₹280 (from ₹260), and maintained its rating at 'Buy'. The near-term pressure on NIMs is expected to continue before a potential recovery in the second half of the financial year, Axis Securities said. A sharper-than-expected contraction in NIMs could pose risks to the bank's ability to deliver a 1 per cent return on assets (RoA), it said The bank is actively working to strengthen its fee income profile, while operating expense growth is expected to remain controlled and slightly below business growth, Axis said. "With no major asset quality concerns on the horizon, credit costs are likely to stay contained, it added. ALSO READ: Analysts at Antique Stock Broking said that the bank delivered a mixed performance, with RoA supported by higher non-core income and a relatively smaller contraction in NIM compared to peers. However, elevated credit costs and higher slippages were notable concerns, it said. Bank of Baroda has consistently maintained RoA above 1 per cent for the past 12 quarters, and this trend is expected to continue, Antique said. The stock appears reasonably priced, with the brokerage maintaining its 'Buy' rating.
Time of India
4 days ago
- Business
- Time of India
Bank of Baroda shares in focus after Q1 profit rises marginally to Rs 4,541 crore. Should you buy or sell?
Shares of state-owned lender Bank of Baroda (BoB) will be in focus on Monday after the bank reported a 2% year-on-year (YoY) increase in standalone net profit to Rs 4,541 crore for the quarter ended June 2025 (Q1 FY26), compared to Rs 4,458 crore in the same period last year. Net interest income (NII) declined 1.4% YoY to Rs 11,435 crore from Rs 11,600 crore. The bank noted that the NII includes the impact of reclassification of interest on income tax refunds. Explore courses from Top Institutes in Please select course: Select a Course Category Project Management Healthcare others Finance Data Science Digital Marketing Technology CXO Data Analytics Management PGDM MCA Design Thinking healthcare Leadership Degree Artificial Intelligence Public Policy Data Science Cybersecurity Product Management MBA Operations Management Others Skills you'll gain: Portfolio Management Project Planning & Risk Analysis Strategic Project/Portfolio Selection Adaptive & Agile Project Management Duration: 6 Months IIT Delhi Certificate Programme in Project Management Starts on May 30, 2024 Get Details Skills you'll gain: Project Planning & Governance Agile Software Development Practices Project Management Tools & Software Techniques Scrum Framework Duration: 12 Weeks Indian School of Business Certificate Programme in IT Project Management Starts on Jun 20, 2024 Get Details Domestic deposits rose 8% YoY to Rs 12.04 lakh crore, while international deposits surged 15% to Rs 2.31 lakh crore from Rs 2.01 lakh crore a year earlier. Total deposits stood at Rs 14.35 lakh crore, up 9% YoY. Retail advances grew 17% to Rs 2.61 lakh crore, compared to Rs 2.22 lakh crore in Q1 FY25. Domestic gross advances rose 12% to Rs 9.91 lakh crore, and total advances increased 14% to Rs 2.15 lakh crore. Asset quality improved during the quarter. Gross Non-Performing Assets (GNPA) declined 60 basis points (bps) YoY to 2.28%, while Net NPA dropped 9 bps to 0.60%. Should you buy, sell, or hold Bank of Baroda's stock? Here's what brokerages say: Motilal Oswal MOSL maintained a 'Neutral' rating on Bank of Baroda, raising the target price from Rs 250 to Rs 260. The brokerage highlighted that healthy NII and other income are supporting earnings momentum. The bank reiterated its NIM guidance of 2.85%–3.0% for FY26 and aims to recover over Rs 10,000 crore during the fiscal. It also plans to add 300 new branches and has made a 40% provision against stressed accounts. For FY27, MOSL expects RoA at 1.14% and RoE at 16.2%. Antique Antique retained a 'Buy' rating with a target price of Rs 290. It noted that profitability was supported by higher treasury gains, despite a sequential dip in the loan book led by the corporate segment. The brokerage observed a slight uptick in slippages, indicating mild pressure on asset quality, but noted that the bank has maintained RoA above 1% for 12 straight quarters. It values the stock attractively at 0.8x FY26 and 0.7x FY27 estimated book value, and raised earnings estimates by 3% for FY26 and 6% for FY27. ( Disclaimer : Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
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Business Standard
6 days ago
- Business
- Business Standard
Bank of Baroda Q1FY26 results: Net profit up 1.9%, margins compress
Public sector lender Bank of Baroda 's (BoB) net profit rose 1.9 per cent year-on-year (Y-o-Y) to Rs 4,541 crore in the first quarter of financial year 2025-26 (Q1FY26), aided by treasury income amid pressure on net interest margin. Sequentially, the net profit fell from Rs 5,048 crore. Net interest income (NII)—the difference between interest earned and interest expended—fell 1.4 per cent Y-o-Y to Rs 11,435 crore. Net interest margin (NIM) from domestic operations fell to 2.91 per cent in Q1FY26, down from 3.18 per cent in Q1FY25. 'Pressure on NII will continue to be there for the next quarter because the transition matrix, both on the asset and liability side, will fully realign in the next quarter and Q3 onwards. Banks may experience lower or negative growth in NII because the cost of deposits will take a bit more time to realign,' said Debadatta Chand, managing director and CEO, Bank of Baroda. Other income, including fees, commission, and treasury earnings, expanded by 88 per cent to Rs 4,675 crore in Q1FY26 from Rs 2,487 crore a year ago. Treasury gains increased to Rs 2,226 crore in the first quarter, compared to Rs 295 crore during the same period last year. 'RAM (Retail, Agri, and Micro, Medium, and Small Enterprises) was at 62.7 per cent because the growth in the corporate loan book was very low at 4.2 per cent, which is expected to increase in the subsequent quarter. However, the bank plans to grow RAM to 65 per cent in the next two to three years,' Chand said. The bank's domestic deposits expanded by 8.1 per cent Y-o-Y to Rs 12.04 trillion. The share of low-cost deposits—current account and savings account (CASA)—stood at 39.33 per cent in June 2025, down from 40.31 per cent a year ago. Going forward, deposit growth is expected to remain around 9-11 per cent. On the credit front, the guidance for FY26 is 11-13 per cent, said Chand. The asset quality profile improved, with gross non-performing assets (NPAs) declining to 2.28 per cent from 2.88 per cent a year ago. The net NPAs declined to 0.60 per cent from 0.69 per cent in June 2024. The provision coverage ratio (PCR), including those for write-offs, stood at 93.18 per cent in June 2025. The lender's capital adequacy ratio stood at 17.19 per cent, with the common equity tier I (CET-1) at 17.61 per cent. On Friday, the BoB stock closed 1 per cent lower at Rs 243.5 per share on the BSE.
New Indian Express
6 days ago
- Business
- New Indian Express
Bank of Baroda net income inches up 1.8% to Rs 4,541 crore in Q1 of FY26
MUMBAI: The second largest state-run lender Bank of Baroda has reported a tepid set of numbers for the June quarter with net income managing to inch up just about 1.8% on-year to Rs 4541.3 crore. Interest income rose 4.9% to Rs 31,091 crore, while the key net interest income fell nearly 1.4% to Rs 11,435 crore from Rs 11,600 crore a year earlier. Non-interest income grew 88% to Rs 4,675 crore, still not large enough to make up for the weak incremental interest income. The global net interest margin for the quarter came in at a low 2.91%, while the domestic net interest margin printed in again at a low 3.06%, the bank said Friday. The bank's gross non-performing assets came down to 2.28% from 2.88%, while net bad loans came in at 0.6% from 0.69%. In absolute terms, gross NPAs came down by 10.7% to Rs 27,572 crore. The provision coverage ratio stood at 93.18% while the slippage ratio stands at 1.16 and credit cost at 0.55%. BoB shares closed 1.36% lower at Rs 243.45 while the index fell almost 0.9%.
