Prabhudas Lilladher has recommended accumulate rating on Bank of Baroda with a target price of Rs 180 in its research report dated February 12, 2017.
Prabhudas Lilladher's research report on Bank of Baroda
BOB earnings were below estimates with PAT of Rs 2.53bn (PLe: Rs6.54bn). Core performance was better mainly from a lower base last year. NII was impacted on back of interest reversals on SDR & higher slippages from mid corporate and some impact of lower yields on loans. Fees were slightly better and strong treasury supported PPOP.
Asset quality was broadly stable but some higher slippages were seen partly due to demonetisation rub‐off effect. Management guidance for FY17 on slippages & recoveries was maintained, but endeavoured to move the PCR further. We believe gradual positive shift happening on credit, controlled opex and steady slippage rate. We retain Accumulate with PT of Rs 180 (from Rs170) based on 1.3x Sep‐18 ABV.
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