Accumulate Bank of Baroda on dip, says Phani Sekhar

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Accumulate Bank of Baroda on dip, says Phani Sekhar

Accumulate Bank of Baroda on dip, says Phani Sekhar of Angel Broking.

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Excerpts from Your Stocks on CNBC-TV18 Watch the full show » ALSO READ See previous views by Phani Sekhar See what other Experts & Brokerages are saying about Bank of Baroda See messages about Bank of Baroda

Accumulate Bank of Baroda on dip, says Phani Sekhar of Angel Broking.

Sekhar told CNBC-TV18, "In the eventual analysis banking tied over but as market is a little more than what your outlook is for the next two-three years. If your outlook is anything less than that you are actually talking about a stock that has rallied 15-16% in the last one month which of course has been a sentimental evader."

He further added, "Apart from that 25% odd growth that Bank of Baroda has shown in balance sheet growth, I don't see much positives. In fact the domestic NIM; 3.5%, seems ripe for moderation. The international NIM surprisingly has gone up that set a multi quarter high and you have gross NPA's and restructured portfolio which constitutes almost 7% of the advances now."

"These are all things which are not going to disappear over the next two quarters. Because even if you look at the consensus estimates about how much rate cuts will happen from the RBI and by this year end, it will not more than 100-125 basis point. Of course these rate cuts will be passed on with a lag, so as far as large numbers of these PSU banks are concerned you might not be looking at a rate cut of more than 50-75 basis points. So most of these distrust assets, which mean there may not be a meaningful recovery as far as the NPA position is concerned for the next three- four quarters. Considering that I will be a bit cautious on Bank of Baroda, of course as I pointed out in the longer term it continues to be a good stock but in the very near term there are pressures and investors should actually take advantage of it and accumulate it no declines."