Asset quality is likely to improve sequentially with gross non-performing assets as well as net NPA falling from 10.3 percent and 4 percent in Q1FY20 respectively.
Public sector lender Bank of Baroda (BoB) is likely to report a net loss in the quarter ended September 2019 due to deferred tax assets adjustment, but rest of the earnings are expected to be stable with some improvement on asset quality front.
According to brokerage houses, the bank could report strong double-digit growth in pre-provision operating profit (PPoP), net interest income and non-interest income (other income) during the quarter YoY.
Operationally, Kotak expects the bank to report a stable performance with NII rising 46.1 percent, PPoP increasing 39 percent YoY while Edelweiss expects PPoP to rise 36 percent.
Asset quality is likely to improve sequentially with gross non-performing assets as well as net NPA falling from 10.3 percent and 4 percent in Q1FY20, respectively.
"We expect fresh slippages at around 2.5 percent primarily on account of a few corporate exposures. The bank has a high exposure to NBFCs, which needs to be monitored," the brokerage said.
Key things to watch out for would be movement of the watchlist and further stress addition, integration of technology and operations post-merger, guidance and way forward post-merger, and an update on the succession of incumbent MD & CEO, PS Jayakumar.The stock plunged 19 percent year-to-date and fell 24 percent during the quarter ended September 2019.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.