Despite a strong pick-up in loan growth (up 5% q-o-q), NII plunged due to lower NIMs, which weakened core operating performance (down 11% y-o-y). NIM fell by 8 bps q-o-q to 2.86% (mainly led by lower yields) and outlook on NIMs is negative. Asset quality improved led by higher write-offs. Higher write-offs drove up provisions, owing to which earnings missed the mark. Nevertheless, core credit cost (44 bps annualised vs 31 bps q-o-q) still remined lower below the long- term average. On the positive side, only treasury gains aided the profitability resulting in RoA at ~1.2% in Q4.
OutlookThe bank is confident that strong recoveries and treasury gains would continue to aid earnings/return ratios in FY26E, despite pressure on core operating profitability. We maintain a Buy with a revised PT of Rs. 260. Stock trades at 0.8x/0.7x its FY2026E/FY2027E ABV estimates.
For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Bank of Baroda - 14052025 - khanDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
