Shares of Bank of Baroda slipped over 5% to a fresh 52-week low on Friday after the public sector lender reported a miss on the earnings front in Q3. Bank of Baroda’s net profit rose 6% year-on-year to Rs 4,837 crore in the quarter ended December 2024 from Rs 4,579 crore a year ago on a rise in non-interest income despite slow loan growth and fall in margins.
Net interest income (NII) in the last quarter missed consensus estimates. It fell 2% sequentially, which was led by a fall in NIM (net interest margins).
Bank of Baroda stock slipped 5.10% to Rs 211.10 on Friday against the previous close of Rs 222.45 on BSE. A total of 13.43 lakh shares of Bank of Baroda changed hands, amounting to a turnover of Rs 28.71 crore.
Market Cap Of The Lender Fell To Rs 1.11 Lakh Crore On BSE
Axis Securities said BoB’s margins declined sharply by 16 bps. QoQ stands at 2.94%, significantly below the management’s guided range of 3.15% (+/-5bps). This was owing to a higher interest recognition to the tune of Rs 300-350 crore in Q2FY25 (owing to the recovery from written-off accounts), owing to which the NIM was higher by 10bps. Adjusting for this one-off, NIMs in Q3FY25 declined by 6 bps.
It maintained a buy call with a target price of Rs 280 against the previous target of Rs 310 per share.
“The bank continues strengthening the core fee income to drive healthy revenue growth. No major asset quality challenges are visible currently. Thus, credit costs are expected to remain under control. Presently, valuations are reasonable. However, healthy and consistent growth delivery and sustained asset quality improvement remain key levers for a meaningful re-rating. Current Valuation: 1.0x Sep’26E ABV; Earlier Valuation: 1.1x Sep’26E ABV,” said Axis.
Motilal Oswal downgraded the stock to neutral on limited earnings and growth levers.
“We tweak our FY25/FY26 EPS estimates by +2.8%/-1.3% and expect FY26E RoA/RoE at 1.05%/15%. We remain watchful on business growth owing to a high CD ratio (82.7%) and increasing reliance on bulk deposits. We estimate margins to remain under check as deposit competition is likely to remain elevated. We downgrade our rating to Neutral and revise our target price to Rs 250 (0.9x Sep’26E ABV),” said Motilal Oswal.
Nuvama said BoB’s Q3FY25 NII missed consensus by 4% and declined QoQ by 2%, which was led by a fall in NIM.
While NII missed estimates, non-interest income and credit cost beat expectations, leading to a 7% beat on PAT—up 6% YoY but down 8% QoQ, said Nuvama. It retained its buy call at a price target of Rs 265 against the earlier Rs 277.
“Bob has underperformed PSU Bank Nifty by 3% over the last month. Given its RoA of 1%+ and cheap valuation of 0.8x BV FY26E, we retain ‘BUY’. Watch out for NIM and LDR, the key variables. Management guided Q4FY25E NIM will be higher ~6bp QoQ,” said Nuvama.
Brokerages React
Following the earnings report, several prominent brokerages revised their target prices for Bank of Baroda shares. Jefferies and HSBC both cut their target price to ₹250 per share, while Nuvama adjusted its target to ₹265 from ₹277. Axis Securities maintained a buy rating but lowered its target from ₹310 to ₹280.
Motilal Oswal downgraded its rating to neutral due to limited growth prospects and revised its target price down to ₹250, citing concerns over high reliance on bulk deposits and an elevated credit-deposit ratio