Buy Bank of Baroda; target of Rs 238: LKP Research

LKP Research's research report on Bank of Baroda

Bank of Baroda (BoB) reported a solid quarterly performance with a steady growth in profitability driven by improved operational efficiency. The bank has also improved its asset quality on growing loan book with credit cost staying well within the guidance, supported by rising contribution from secured assets and tightening underwriting policies. Further, increase in deposit costs owing to high competitive intensity has impacted margins. Nevertheless, margins are expected to remain range bound in the near term as the bank is focusing on high yielding assets and garnering low cost funds.

Outlook

Therefore, with a shift in focus towards retail loan book, strong asset quality and enhancing operational efficiency, we expect the bank to maintain the growth momentum. Hence, we assign a BUY rating on the stock, based on 0.8x FY27E BVPS with a target price of ₹238.

For all recommendations report, click here