Bank of Baroda's Q3 show fails to impress, stock sinks 4%; Jefferies, HSBC cut target price to Rs 250

Bank of Baroda’s net interest income grew 2.8 percent to Rs 11,417 crore in Q3.

Public sector lender Bank of Baroda's shares tumbled 4 percent in trade on January 31, following its earnings show for the three months ended December 31, 2024.

The lender reported a net profit of Rs 4,837 crore for the third quarter ended on December 31, 2024. The consolidated profit was 5.6 percent higher than Rs 4,579 crore in the October-December quarter of the previous year.

The total income of the bank increased to Rs 34,676 crore in the third quarter of the current fiscal from Rs 31,416 crore in the year-ago period, Bank of Baroda said in a regulatory filing.

During the quarter, Bank of Baroda reported that its interest income rose to Rs 30,908 crore from Rs 28,605 crore in the same period last fiscal. The bank’s Net Interest Income (NII) grew 2.8 percent to Rs 11,417 crore as against Rs 11,101 crore in the same quarter of FY24.

At 9.17 am, BoB shares were trading at Rs 213.98, down 3.9 percent on the NSE.

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Bank of Baroda's NII missed consensus expectations by four percent. Further, the stock has underperformed PSU Bank Nifty by 3 percent over the last one month, noted Nuvama Institutional Equities. The brokerage kept its 'buy' call intact, but cut its target price to Rs 265 per share, from Rs 277 earlier.

Both, HSBC and Jefferies maintained a 'hold' call on Bank of Baroda, while cutting their target prices to Rs 250 per share. HSBC said while the asset quality remained healthy, it revised its EPS estimates downwards on further NIM pressure.

Jefferies said Q3 profit exceeded expectations due to lower provisions, but NII growth remained weak at 3 percent, despite 12 percent loan growth. The brokerage flagged that higher domestic loan-to-deposit ratio (LDR) would constrain loan growth going ahead amid softer deposit inflows, though asset quality remained stable with low credit costs.

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