Buy Bank of Baroda; target of Rs 289: Anand Rathi

Anand Rathi's research report on Bank of Baroda

Decent core operating performance and modest provisioning (~40bps) led to the Bank of Baroda’s strong profitability in Q3, its RoA coming at 1.15%. Asset quality improved. Key positives were 1) moderate slippages (~1% of loans), 2) 1%+ RoA (for ten straight quarters), 3) strong traction in retail loans (up 4.8% q/q) and 4) robust liquidity and capitalisation. Ahead, with a pick-up in credit growth, stable margins and modest credit costs, earnings are likely to be strong.

Outlook

We maintain a Buy, with a higher TP of Rs289, 1x P/ABV on the FY27e book.

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