Robinhood reports August 2025 customer and trading metrics
On Thursday, Nomura/Instinet analysts downgraded Bank of Baroda (NSE:BOB)’s stock rating from ’Buy’ to ’Neutral’ and reduced the price target from INR265.00 to INR235.00. The revision follows the bank’s fourth-quarter financial results for the fiscal year 2025, which showed a year-on-year decline in core pre-provision operating profit (PPOP) by 7%, falling short of Nomura’s expectations. The lower net interest income (NII), which also decreased by 7% year-on-year and was 6% below the firm’s estimate, and higher operating expenses, which were 3% above the estimate, contributed to the weaker performance.
Despite these challenges, Bank of Baroda reported a profit after tax (PAT) of INR50.5 billion, marking a 3% increase from the previous year and exceeding Nomura’s estimate by 10%. This was partly due to higher non-interest income. Additionally, the bank saw healthy growth in loans and deposits, with quarterly increases of 5.1% and 4.9%, respectively.
Management at Bank of Baroda anticipates net interest margins (NIMs) for the fiscal year 2026 to remain consistent with the levels from fiscal year 2025. However, Nomura expects pressure on NIMs due to potential cuts in the repo rate. Consequently, the firm has revised its NIM outlook for fiscal years 2026 and 2027, reducing estimates by 18 basis points and 14 basis points, respectively, to approximately 2.6%.
The forecast for the bank’s return on assets (RoA) and return on equity (RoE) over fiscal years 2026 to 2028 has been set at around 0.9% and 12-13%, which is lower compared to the 1% RoA and 15-16% RoE projected for State Bank of India (NSE:SBI) (SBIN:IN). Additionally, the earnings per share (EPS) compound annual growth rate (CAGR) for Bank of Baroda is estimated at 3% over fiscal years 2025 to 2028, significantly lower than the 8% CAGR for State Bank of India.
Despite trading at what is considered an inexpensive valuation of 0.7 times the forecasted fiscal year 2027 price-to-book value (P/BV), Nomura does not foresee immediate catalysts for Bank of Baroda’s stock to outperform in the near term.
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