Bank of Baroda Q1 profit jumps 79%: Should you buy, sell or hold the stock?
The share price of the Bank of Baroda dipped in early trade on August 1 after the company posted stronger figures for the quarter ending June 2022. Despite a drop in other income and pre-provision operating profit, standalone profit increased by 4% year on year to Rs 2,168 crore for the quarter ended June 2022. The substantial decrease in bad loan provisions improved the bottom line.
Net interest income increased by 12% year last year to Rs 8,838.4 crore in the June quarter, with credit increasing by 18% and global deposits increasing by 10.9 percent. Total provisions and contingencies decreased by 58 percent year on year to Rs 1,684.80 crore for the quarter ended June 2022, representing a 55 percent sequential dip, while bad loan provisions decreased by 39 percent year on year to Rs 1,560 crore for the quarter.
CLSA Brokerage firm CLSA has maintained a buy recommendation on the stock and boosted the target price to Rs 145 per share from Rs 125 per share following the company’s June quarter earnings.
The first quarter was consistent, with better-than-expected growth offset by a little margin decline. Morgan Stanley has maintained an overweight rating on the stock and boosted the target price to Rs 155 per share from Rs 140. Earnings in the first quarter were 5% higher than expected, owing to lower credit charges. According to CNBC-TV18, the economy grew by 8% in FY23/F24. Motilal Oswal Bank of Baroda reported generally stable operating results, with decreased provisions driving net profitability.
Business growth was strong at 3% year on year, powered by retail loans, but margins fell somewhat. We raise our profitability forecast for FY23/FY24 by 22 percent /11 percent to account for greater NII and lower credit costs. 7% and values the stock at Rs 150. Bank of Baroda was trading at Rs 114.29 percent on the BSE at 9:19 a.m.