Sharekhan's research report on Bank of Baroda
Q3FY21 results were positive, with operational numbers largely matching expectations; reported asset quality improved q-o-q as domestic margins rose. Proforma asset quality with GNPA / NNPA at 9.63% / 3.36% saw a increase of 30BPS and 69BPS on sequential basis; overall collection efficiency is at 92% and 95-96% for corporate book. BoB has proactively created provisions and has a manageable restructuring book; but asset quality outlook challenges persist; we expect higher slippages/credit cost in Q4 and H1FY22
Reasonable valuations of 0.41x / 0.39x FY22E / FY23E BVPS, but outlook still uncertain; we maintain a Hold rating with an unchanged PT of Rs 75.
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