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Last Updated : Nov 11, 2019 10:09 AM IST | Source: Moneycontrol.com

Bank of Baroda shares jumps 5% despite mixed reviews from brokerages

The sequential growth in profit was 3.8 percent and NII grew by 8 percent with 19bps expansion in net interest margin at 2.81 percent QoQ.

 
 
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Shares of Bank of Baroda (BoB) jumped more than 5 percent on BSE in the morning trade on November 11 even after some brokerages cut the stock’s target price after the state-owned lender released its quarterly scorecard.

The public sector lender on November 8 said its July-September quarter profit jumped 73.2 percent year-on-year to Rs 736.7 crore despite a sharp increase in provisions.

The growth was driven by other income, net interest income (NII) and pre-provision operating profit (PPoP).

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Results are not comparable year-on-year due to the merger of Vijaya Bank and Dena Bank with BoB. Hence the sequential growth in profit was 3.8 percent and NII grew by 8 percent, with 19bps expansion in net interest margin at 2.81 percent QoQ.

Citi has a buy recommendation on Bank of Baroda, with a target price of Rs 115. The global financial firm said BoB's asset quality challenges still persisted and were a binding constraint. Progress on merger integration and NPA resolutions were the key factors, Citi said.

Credit Suisse maintained a neutral call but cut the target price to Rs 105 from Rs 115.

The foreign brokerage has cut 2020-21 earnings per share (EPS) estimates by 21-30 percent on dilution and higher credit costs.

Kotak Institutional Equities maintained an add rating on the stock but cut the target price to Rs 105 from Rs 135 and said that high provisions dented an otherwise better-than-expected performance.

"Valuations are inexpensive but the merger process is getting along slowly. Risk-reward is still favourable at the current levels to maintain our positive view," said Kotak Institutional Equities.

Shares of Bank of Baroda were trading 2.88 percent up at Rs 96.50 on BSE at 0955 hours.

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First Published on Nov 11, 2019 10:09 am
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