Buy Bank of Baroda; target of Rs 260: Emkay Global Financial

Emkay Global Financial is bullish on Bank of Baroda has recommended buy rating on the stock with a target price of Rs 260 in its research report dated August 05, 2023.

Broker Research

August 09, 2023 / 14:15 IST

Buy

26 Aug, 2025 12:21

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Emkay Global Financial's research report on Bank of Baroda

Bank of Baroda (BoB) reported a miss on PAT at Rs40.7bn (est. at Rs43.2bn) due to sharper-than-expected margin dip (down 26bps QoQ to 3.3% similar to SBI), leading to NII miss of 7% coupled with higher-than-usual tax rate. The bank continued to report lower slippages, leading to improved GNPA ratio to 3.5%/NNPA at 0.8%. Additionally, the bank has provided Rs1.4bn and now holds Rs6.4bn/43% on its Rs16bn exposure to troubled GoAir – though the bank remains confident on its full recovery. BoB expects growth to remain healthy at 14-15%, with retail growing at a faster pace of 18-20%, which along with MCR repricing should help sustain margins at ~3.3% (reported) in FY24. We expect BoB to deliver superior RoA/RoE of 1.1%/16-17% over FY24-26E, while healthy CET-1 at 12% provides comfort.

Outlook

We retain BUY with a TP of Rs260, valuing the bank at 1x its June 25E ABV and subs/inv. value at Rs6/share. Value unlocking in the insurance subsidiary and strategic tie-up in BoB cards will be near-term catalysts.

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