Hold Bank of Baroda; target of Rs 200: ICICI Direct

ICICI Direct's research report on Bank of Baroda

BoB has a pan-India presence with a wide network of 5422 branches. Of these, 28% branches (Rs 1500 branches) are in Gujarat and Maharashtra that are CASA rich states and have higher industrial activity. The domestic CASA ratio had been strong at 39%.

Outlook

We expect RoEs to improve to 12% by FY19E. We roll over to FY19 estimates. Accordingly, we revise TP higher to Rs 200 valuing at 1.3x FY19E ABV. We maintain HOLD. Bank indication of no fresh capital in the next two years and plans to sell noncore assets like NSE and UTI AMC stake, may garner Rs 2500 crore.