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Investing.com - UBS has raised its price target on Bank of Baroda (NS:BOB) to INR320.00 from INR280.00 while maintaining a Buy rating following the bank’s better-than-expected quarterly results.
The bank reported a profit after tax of Rs48.1 billion, exceeding UBS estimates, driven by higher net interest income (NII) and lower provisions. NII increased 3% year-over-year, beating expectations by 6%, while net interest margins expanded 5 basis points quarter-over-quarter to 2.96%.
Bank of Baroda’s gross slippages (annualized) moderated to 0.91%, down 16 basis points year-over-year and 25 basis points quarter-over-quarter. The MSME and retail segments (excluding agriculture) saw calculated slippages of approximately 2.9% and 1.3% respectively, improving from 3.6% and 1.6% in the previous quarter.
Credit costs (annualized) fell to approximately 40 basis points in the second quarter, down from 66 basis points in the first quarter, despite the bank making additional floating provisions of Rs4 billion.
UBS projects that Bank of Baroda will maintain stable net interest margins with a possible slight moderation in the fourth quarter due to an anticipated 25 basis point repo rate cut, while estimating return on assets and return on equity of approximately 0.9% and 13% respectively over fiscal years 2026-2027.
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