Shares of the bank were trading 2.80 per cent higher at Rs 170.85 apiece at around 1:30 pm after the company said its total business crossed the Rs 21 lakh crore milestone in the quarter ended March.
By India Today Business DeskBank of Baroda shares gained nearly 5 per cent in early trade on Tuesday after the firm shared a strong business update for the March quarter.
Shares of the bank were trading 2.80 per cent higher at Rs 170.85 apiece at around 1:30 pm after the company said its total business crossed the Rs 21 lakh crore milestone in the quarter ended March.
The bank said it recorded a 16.8 per cent jump in business at Rs 21,77,307 crore as on March 31, 2023, compared to Rs 18,64,059 crore in the corresponding period a year ago.
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Bank of Baroda’s total deposits also rose 15.1 per cent to Rs 12.04 lakh crore against Rs 10.45 lakh crore, while domestic deposits rose 13 per cent to 10.47 lakh crore from Rs 9.27 lakh crore year-on-year.
The bank’s global gross advances were up 19 percent at Rs 9.7 lakh crore against Rs 8.18 lakh crore and domestic advances were up 16.9 percent YoY at Rs 7.99 lakh crore from Rs 6.84 lakh.
Meanwhile, the bank has revised its overnight and 1-year Marginal Cost of Funds Based Lending Rate by 5 basis points to 7.95 per cent and 8.6 per cent, respectively. This will come into effect from April 12.
The strong business update has been welcomed by a host of brokerages including Motilal Oswal, JP Morgan, Morgan Stanley and Citi.
Motilal Oswal said the bank’s update indicates that both advances and deposits are growing at a rapid pace. The brokerage added that retail loans are driving its overall loan growth, while internal book is also witnessing strong trends.
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The brokerage expects Bank of Baroda’s margins to be stable to positive, while “controlled credit costs” will drive overall profitability. Motilal Oswal has maintained a ‘buy’ rating on the stock.
JP Morgan has given an ‘overweight’ rating to the stock with a target of Rs 220 per share. It noted that the bank reported Q4 gross advances growth of 19 per cent year-on-year and domestic advances.
JPMorgan has given an “overweight” rating to the stock, with a target of Rs 220 per share. It expects the bank to deliver a 17 percent return on equity in Q4FY23. Morgan Stanley also has an ‘overweight’ rating for the stock, with a target of Rs 220.
Meanwhile, brokerage firm Citi has given Bank of Baroda a ‘buy’ rating with a target price of Rs 210 per share.
While the brokerage said the bank’s net interest margins (NIMs) may be partially offset by its focus on building traction in the retail deposit base, it still expects Bank of Baroda’s profit to double in Q4 and also report a healthy net interest income growth of more than 30 per cent year on year.
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Rodrigo Wolf
Trace Hane
Kraig Prohaska