Bank of Baroda Q1 preview: Net profit may rise 86.5% YoY to Rs 4,044.3 crore

India's leading public sector bank's net profit is seen rising 86.5 percent YoY to Rs 4044.3 crore according to an average of two brokerage estimates conducted by Moneycontrol.

Bank of Baroda, India's leading public sector bank's net profit is seen rising 86.5 percent YoY to Rs 4044.3 crore according to an average of two brokerage estimates conducted by Moneycontrol. The prominent public sector lender is all set to report its Q1 numbers on August 5.

Nirmal Bang expects Bank of Baroda to report a net profit of Rs 4,469.2 crore, up 106.1 percent year-on-year (down 6.4 percent quarter-on-quarter). Net Interest Income (NII) is expected to increase by 32 percent Y-o-Y (up 1.3 percent Q-o-Q) to Rs 11,670.3 crore, according to Nirmal Bang. Pre-Provision Operating Profit (PPOP) is likely to rise by 60.1 percent Y-o-Y (down 10.2 percent Q-o-Q) to Rs 7,249.8 crore.

Brokerage firm Kotak Institutional Equities expects Bank of Baroda to report a net profit of Rs 3,619.4 crore, up 66.9 percent year-on-year (down 24.2 percent quarter-on-quarter). Net Interest Income (NII) is expected to increase by 27.9 percent Y-o-Y (down 1.9 percent Q-o-Q) to Rs 11,305.8 crore, according to Kotak Equities. Pre-Provision Operating Profit (PPOP) is likely to rise by 46.6 percent Y-o-Y (down 17.8 percent Q-o-Q) to Rs 6,637.3 crore.

In the research note, Kotak Institutional Equities stated, “We expect solid operating profit growth of around 45 percent YoY led by strong revenue growth. Base quarter of 1QFY23 had higher treasury loss. We are building NIM to decline 10 bps QoQ. We expect loan growth to be solid at 18% YoY leading to ~30% YoY NII growth.”

Also Read: State Bank of India Q1 Results: Net profit grows 178% to Rs 16,884 crore, asset quality improves

The firm further added, “We expect slippages at around 1.7% (Rs 41 bn) but unlike the previous quarter, we should see lower upgrade/recovery. We expect to hear commentary to be quite positive on asset quality as seen in recent quarters. Key discussion would be the sustainability of loan growth, deposit-related challenges and NIM outlook in the near term.”

Brokerage Views

Yes Securities has a ‘buy’ call on Bank of Baroda with a target price of Rs 234. The current market price of Bank of Baroda is Rs 192. Brokerage firm Motilal Oswal is also bullish on Bank of Baroda and has recommended buy rating on the stock with a target price of Rs 240 in its research report dated May 16, 2023.

Stock Performance

Bank of Baroda stock has given a return of 13.88 percent over the last six months. The stock has hence outperformed the Nifty Bank index as the benchmark index has given a return of 8.48 percent over the same duration.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.