BoB up 15%; Morgan Stanley raises target on new management

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26 Aug, 2025 12:21

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Shares of Bank of Baroda soared 15 percent intraday on Monday riding high on Indradhanush, the seven-pronged PSU banks' revival plan.

Bullish Morgan Stanley says it's a game changer for Bank of Baroda to get private sector CEO and Chairman. The brokerage has has upgraded BoB to overweight from underweight. It almost doubled target price to Rs Rs 240 (30 percent upside) from Rs 130 per share expecting a re-rating as the market will likely perceive BoB as a quasi private bank.

According to Morgan Stanley, newly appointed CEO PS Jayakumar and non-executive Chairman Ravi Venkatesan may help BoB clean the balance sheet aggressively, raise capital and position the bank for growth.

The public sector lender's asset quality had deteriorated further in April-June quarter. Its asset quality weakened as gross non-performing assets (NPA) climbed 102 basis points year-on-year (up 41 bps quarter-on-quarter) to 4.13 percent and net NPA soared 49 bps on yearly basis (up 18 bps sequentially) to 2.07 percent in the quarter gone by.

Provisions for bad loans increased by 13.85 percent year-on-year to Rs 599.7 crore in June quarter, but that fell 67 percent from Rs 1,817.5 crore in March quarter.

Its Q1 profitability was impacted by lower other income & operating profit and low growth in net interest income & higher provisions. Profit fell 22.8 percent year-on-year to Rs 1,052 crore while net interest income grew by 4 percent to Rs 3,460 crore in April-June quarter.

At 11:53 hrs Bank of Baroda was at Rs 209.50, up Rs 25.05, or 13.58 percent on the BSE.

Posted by Nasrin SultanaFollow @NasrinzStory