Motilal Oswal neutral on Bank of Baroda

Motilal Oswal has maintained neutral rating on Bank of Baroda with a target of Rs 850 in its February 5, 2013 research report.
 
"BoB's 3QFY13 PAT was down 22% YoY to INR10.1b (13% below est of INR11.6b) led by moderate loan growth (+15% YoY; domestic loan growth of 11% YoY), global NIMs decline of 6bp QoQ to 2.65% and provisions of INR10.3b (estimate of INR9.4b) due to higher-than-expected slippages. Net slippages for 3QFY13 increased to INR18b v/s quarterly run-rate of INR11- 11.5b in the last three quarters. During the quarter, BoB restructured loans of INR22b, compared to INR15.9b in 2QFY13. While overall GNPAs percentage stood at 2.4%, international GNPAs remained low at 0.73% (0.69%), implying GNPAs percentage in domestic book of 3.3%, compared to 2.6% a quarter ago. PCR, both calculated and including technical write-off, declined ~5% QoQ to 54% and 71%."
 
"On the back of higher-than-expected stress on asset quality and lower margins and fees, we cut our earnings estimate by 5-7% for FY13E/15E. While valuations are reasonable, it needs to be seen in the context of expected fall in RoA/RoE in FY13/FY14/FY15. Maintain Neutral," says Motilal Oswal research report.

FIIs holding more than 30% in Indian cos

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