Bank of Baroda reported strong earnings growth during the second quarter of FY27, prompting several brokerages to maintain their bullish view on the stock and revising their ratings and earnings estimates. While JPMorgan, HSBC, UBS and Citi remained positive on the PSU stock, Jefferies maintained a Hold rating, citing mixed trends in core fee income and profitability.
Bank of Baroda reported a 35.8% year-on-year (YoY) increase in standalone net profit to Rs 6,532 crore in Q2FY27. Its net interest income (NII) for the quarter grew 9% YoY to Rs 13,026 crore. Gross advances grew 18.3%, and the gross non-performing asset (GNPA) ratio improved to 1.78%.
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JPMorgan maintained its Overweight rating on Bank of Baroda but marginally cut its target price to Rs 310 from Rs 315. The brokerage raised its FY27 earnings per share (EPS) estimate by 8.2% and upgraded its loan growth guidance to 13-15% from 12-14%. Deposit growth guidance was also increased to 11-13%.
HSBC upgraded the stock to Buy from Hold and raised its target price to Rs 284 from Rs 276. The brokerage highlighted stronger-than-expected core profit, supported by higher fee income and lower underlying credit costs. It expects improving net interest margins (NIM) and loan growth to support a return on assets (RoA) of around 1% and return on equity (RoE) of 13%.
HSBC also raised its FY27-29 EPS estimates by 10.7-16.7%, although the transition to expected credit loss (ECL) provisioning remains a key risk.
UBS maintained its Buy rating but reduced the target price to Rs 300 from Rs 310. It flagged a 3-basis-point sequential decline in NIM to 2.74%, while adjusted profit after tax increased 12% YoY to Rs 54 billion.
Jefferies maintained its Hold rating with a target price of Rs 275. It noted that treasury gains supported profitability and helped strengthen provisions. However, weak core fee income remains an area of concern.
Citi maintained its Buy rating with a target price of Rs 310, raising its FY27 earnings estimate by 12%. It expects margins to improve in the second half as repo-linked and corporate loans reprice, while highlighting strong RAM loan growth and improving asset quality.
Overall, brokerages remain constructive on Bank of Baroda's growth outlook, with improving asset quality, stronger credit growth and potential margin recovery supporting the positive view.
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