Buy Bank of Baroda; target of Rs 280: Emkay Global Financial

Emkay Global Financial recommended buy rating on Bank of Baroda with a target price of Rs 280 in its research report dated May 08, 2025.

Broker Research

May 08, 2025 / 14:49 IST

buy

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's research report on Bank of Baroda

Bank of Baroda (BoB) reported healthy credit growth at 13% YoY. However, the sharp and constant decline in NIM (by 8bps QoQ) to 2.86% (due to lower loan yields) and the higher provisions were the upsets during 4Q. Still, the higher income helped the bank report nearly in-line PAT at Rs50bn/1.1% RoA. The management expects credit growth of 11-13%, which we believe could put further pressure on margins amid accelerated policy rate cuts. Thus, we believe that management guidance to 3% NIM in FY26 looks optimistic. We cut earnings by 3-5% over FY25-27E, mainly factoring in the slower growth/margin contraction and the partial offset by better treasury gains and lower LLP (as the bank’s asset quality holds up well).

Outlook

We also cut our TP by ~7% to Rs280 from Rs300, valuing the standalone bank at 0.9x FY27E ABV and subs/investments at Rs15/sh; retain BUY.

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