Bank Of Baroda - Scaling New Heights: Prabhudas Lilladher

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Prabhudas Lilladher Report

We remain positive on Bank of Baroda Ltd. given,

domestic corporate credit is reviving as growth touched an eight-year high of up 13% YoY and the bank would be a key beneficiary as corporate loan share is ~40% and market share in overall advances is sizeable at 6.6% post-merger,
Bank of Baroda could see net interest margin expansion for one-two more quarters while private bank margins might peak in Q3 FY22, due to higher share of Marginal Cost of Funds Based Landing Rate linked loans (53% versus 30% for private banks),
balance sheet is stronger as gross non-performing asset in Q2 FY23 reduced to 5.3% from 8.1% while provision coverage ratio enhanced from 67% to 79%; expect return on asset/return on equity to improve over FY22-25E from 0.6%/9.6% to 0.9%/14.7%.

We had recently raised FY23E earnings by 8% for Bank of Baroda, however, with asset quality risks abating and steady credit growth outlook, there is likelihood of further earnings upgrade.

Click on the attachment to read the full report:

Prabhudas Lilladher Bank of Baroda Update.pdf

Read Document

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.