Sharekhan's research report on Bank of Baroda
Bank of Baroda (BOB) reported PAT at Rs. 2,168 crore (up 79% yoy/22% qoq), which was above consensus and our estimates (33%) mainly on account of lower credit cost reported during the quarter (0.9% of average advances versus 2.0% last quarter). BOB reported healthy loan growth of 20% y-o-y/3% q-o-q versus 10% y-o-y in the last quarter, led by strong growth in retail book (23% y-o-y), corporate book (17% y-o-y), and overseas book (31%). Core operating profit grew by 17.4% y-o-y but declined by 29% q-o-q. The sharp decline in core PPoP from last quarter was mainly due to lower core fee income q-o-q and lower recovery q-o-q.
Asset quality improved with GNPA/NNPA ratios falling by 35 bps/14 bps q-o-q to 6.26%/1.58%. PCR improved by 66 bps q-o-q to 75.9%. Total slippages were down 25% q-o-q. Overall standard restructured book stood at 2.5% of net advances. At the CMP, the stock trades at 0.7/0.6x its FY23E/24E ABV. We maintain Buy with a revised PT of Rs. 140. Our preferred picks among PSU banks basket remains SBI and BOB.
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