Bank of Baroda shares slumped up to 5% on Friday to Rs 211.90 on the BSE as brokerages lowered the PSU lender’s target price after its Q3 net interest income (NII) below consensus projections and fell 2% sequentially, driven by a drop in NIM.
Global brokerage firms Jefferies and HSBC cut the target price to Rs 250 per share. Jefferies said the Q3 profit result above expectations owing to fewer provisions. According to Nuvama analysts, while NII missed forecasts, non-interest income and credit costs exceeded expectations, resulting in a 7% increase in PAT—up 6% year on year but down 8% quarter on quarter. “Our revised target price of Rs 265 is based on about 1x BV FY26E. BoB underperformed the PSU Bank Nifty by 3%. BoB’s net profit grew 6% year on year to ₹4,837 crore in the quarter ended December 2024 from ₹4,579 crore a year before, owing to a substantial jump in non-interest revenue despite modest loan growth and margins.
BoB CEO Debadatta Chand stated that the bank intends to complete the current fiscal year with a NIM of between 3% and 3.10%, which is lower than the 3.10-3.20% expectation at the start of the year but higher than the third quarter, owing to deposits being repriced at a lower rate.”We are mindful of our credit-to-deposit ratio of 84% which is near the high point of our expectations but with deposits projected to rise by 9-11% and advances growth seen at 11-13% we expect to be closer to 80%,” Chand added.
