Neutral Bank of Baroda; target of Rs 290: Motilal Oswal

Motilal Oswal's research report on Bank of Baroda

Bank of Baroda (BOB) reported 2QFY26 PAT of INR48.1b (up 5.9% QoQ, down 8% YoY, 12% beat), aided by NII growth (owing to IT refund of INR7.5b), lower provisions and contained opex growth. NII grew by 2.9% YoY/ 4.5% QoQ to INR119.5b (9% beat) amid interest on IT refund. Reported NIMs improved by 5bp QoQ to 2.96%, while adjusted NIMs would have been lower by 3-5bp QoQ. We raise our FY26 earnings estimate by 5% while maintaining FY27 forecasts, projecting FY27E RoA/RoE at 1.03%/14.7%. We reiterate our Neutral rating with a TP of INR290 (1.0x FY27E ABV).

Outlook

We raise our FY26 earnings estimate by 5% while maintaining FY27 forecasts, projecting FY27E RoA/RoE at 1.03%/14.7%. We reiterate our Neutral rating with a TP of INR290 (1.0x FY27E ABV).