Bank of Baroda Q4 Results Review: Dolat Capital Revises Rating To 'Add', Sees 18% Upside — Here's Why

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Dolat Capital Report

Bank of Baroda reported weaker than expected net interest income (-7% YoY), with net interest margin at 2.86% (-8 bps QoQ and -24 bps in H2), led by immediate re-pricing of EBLR loans and continued rise in CoD. PAT, however, benefitted from reversal of govt guaranteed security receipts of Rs 4.9 billion and lower tax rate (23%), with RoA at 1.16%. Loan growth at 5% QoQ was broad-based.

Bank expects FY26E NIM to be in-line with FY25 (at 3%), though Q1 FY26E margins will be under pressure. While overall slippages were contained, slippages increased in the MSME segment and PL NPAs continue to rise (mainly digital PL).

We factor in slightly lower NIM, with 3-4% downward revision in estimates for FY26/27E. With margins settling at lower levels, limited levers for incremental profitability and near-nil provision buffers, we revise rating to ‘Accumulate’ from Buy, valuing the bank at 0.9x FY27E P/ABV against RoA/RoE of 1%/15%.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit. 

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.