Feb 14, 2017 01:54 PM IST | Source: Moneycontrol.com
Buy Bank of Baroda; target of Rs 208: HDFC Securities
HDFC Securities is bullish on Bank of Baroda has recommended buy rating on the stock with a target price of Rs 208 in its research report dated February 13, 2017.
HDFC Securities' research report on Bank of Baroda
NIM dipped 23bps QoQ to 2.1%, led by interest reversals of Rs 2.6bn towards SDR and S4A exposures and Rs 920mn towards NPAs. Focus on profitable growth, improving CD ratio (domestic CD ratio at a mere 57% - lowest amongst peers) and increasing share of domestic book provide an upside to our conservative NIM estimate of 2.3% over FY16-18E.
We like its focus on profitable growth, higher CRAR, superior PCR, diversified book and lower stressed assets. We expect ROAA to improve 35bps to 0.63% by FY19, with further upside risk to our conservative estimates on growth, NIM and LLP. Maintain BUY with TP of Rs 208 (1.4x Dec-18 ABV of Rs 149).
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