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Last Updated : Aug 11, 2020 09:37 AM IST | Source: Moneycontrol.com

Bank of Baroda: What should investors do after Q1: buy, sell or hold?

Bank of Baroda: Net interest income during the quarter grew by 4.9 percent to Rs 6,816.1 crore, compared to Rs 6,496 crore in the same period last year.

Bank of Baroda could see slippages go up significantly in the coming months.
Bank of Baroda could see slippages go up significantly in the coming months.
 
 
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Bank of Baroda share price declined 3 percent in the early trade on August 11, a day after the lender reported its June quarter numbers.

The bank posted a net loss of Rs 864.3 crore for the June quarter 2020 due to provisioning on standard accounts. The bank's profit was at Rs 709.6 crore in the corresponding period last fiscal.

"On account of provisioning on standard accounts of Rs 1,811 crore, the bank reported a net loss of Rs 864 crore in Q1 FY21 and consolidated net loss stood at Rs 679 crore," said the bank.

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Net interest income during the quarter grew by 4.9 percent to Rs 6,816.1 crore compared to Rs 6,496 crore in the same period last year.

"Global advances growth was at 8.6 percent with organic retail loans growing at 13.5 percent. Domestic CASA ratio increased by 294 bps YoY to 39.49 percent. Domestic retail term deposits increased by 10.4 percent," the bank said in its BSE filing.

Here is what brokerages have to say on the stock and the company:

Citi | Rating: Buy | Target: Lower to Rs 65 from Rs 75

Higher provisions in Q1 led to the loss, while moratorium was at 21 percent.

Lower FY21E/22e PAT estimates by 30 percent/ over 4 percent adjusting for Q1 miss & lower the margin, reported CNBC-TV18.

Morgan Stanley | Rating: Underweight | Target: Rs 42

Lower CET-1, elevated slippages and elevated term loan moratorium were the key negatives, while maintaining underweight against above backdrop despite cheap valuation, reported CNBC-TV18.

Prabhudas Lilladher | Rating: Buy | Target: revises from Rs 83 to Rs 65

Concerns have remained from high NBFC share, while a high mix of corporate/SME book can see higher restructuring and hence we believe, high credit cost will continue to remain a challenge to profitability. Decent flow in low-cost liabilities and strong PCR of 72 percent provides some comfort to the balance sheet.

Dolat Capital | Rating: Reduce | Target: 52

BoB’s CET ratio declined by 36 bps QoQ to 9.08 percent led by the reported loss, sequential rise in capital consumption and DTA creation during 1QFY21. The bank plans to raise Rs 135 billion equity capital over the near term, including Rs 90 billion in core equity and Rs45 billion of AT1 bonds.

The risks included higher-than-estimated credit loss from the corporate segment, inability to contain opex, higher than anticipated stress on macroeconomy from COVID-19 and dilution risk from equity raise at below book.

At 0920 hours, Bank Of Baroda was quoting at Rs 47.95, down Rs 0.60, or 1.24 percent on the BSE.
First Published on Aug 11, 2020 09:30 am
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