Motilal Oswal's research report on Bank of Baroda
Bank of Baroda (BOB) reported a strong quarter as PPoP grew 43% YoY, aided by higher other income and lower provisions. These resulted in strong earnings beat. Business growth was healthy with loans rising 5.6% QoQ and margins expanding 16bp QoQ in 4QFY23. Asset quality improved as slippages remained controlled at INR27.4b, which coupled with healthy recoveries/upgrades resulted in GNPA/NNPA ratio moderating to 3.8%/0.9%. PCR was stable at ~77% in 4QFY23. Total SMA 1/2 (>INR50m) was controlled at 32bp of loans, while restructured book moderated to 1.5% of loans during the quarter.
Outlook
We maintain our earnings estimate on the stock and estimate FY25 RoA/ RoE of 1.1%/16.4%. We value the stock at INR240 (premised on 1.1x Sep’24E ABV). We reiterate our BUY rating on BOB.
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