State-owned Bank of Baroda shares jumped 5.15% in early trade on Monday, November 3, to hit a fresh 1-year high of ₹292 apiece after the lender reported better-than-expected numbers for the September quarter, driven by stronger NII growth, controlled operating expenses, and lower provisions.
It reported a net profit of ₹4,809 crore, which, although down 8.2% YoY, came in higher than analysts’ estimates. The bank’s net interest income (NII) registered an increase of 2.7% YoY to ₹11,954 crore, up from ₹11,637 crore in Q2FY25, while the net interest margin remained stable on a QoQ basis at 3.10% but fell marginally by 17 basis points YoY to 3.27%.
In other income, the bank saw a steep 32% drop in non-interest income, which fell to ₹3,515 crore from ₹5,166 crore a year ago. A sharp 36% year-on-year fall in treasury income to ₹1,086 crore weighed on the bank’s profitability.
On the asset quality front, the bank reported an improvement, with the gross non-performing asset (GNPA) ratio easing to 2.16% from 2.50%, and the net NPA ratio improving slightly to 0.57% from 0.60%. The capital adequacy ratio strengthened to 16.54%, up 28 basis points year-over-year.
Additionally, provisions declined sharply by 47.2% YoY to ₹1,232 crore, providing some support to the bottom line. The operating profit before provisions came in at ₹7,576 crore, marking a 20.1% YoY drop from ₹9,477 crore in the September 2024 quarter.
The bank’s growth momentum picked up in Q2 after a muted Q1, with the credit-deposit (CD) ratio rising 124 basis points QoQ to 83.9%. Corporate loan growth is expected to accelerate, with management guiding for 9–10% YoY growth (versus 3% YoY in Q2).
Should you buy Bank of Baroda after Q2?
Domestic brokerage firm Motilal Oswal lifted its FY26 earnings estimate by 5% while maintaining FY27 forecasts, projecting FY27E RoA/RoE at 1.03%/14.7%. The brokerage reiterated its ‘Neutral’ rating with a target price of ₹290.
Meanwhile, Anand Rathi maintained its ‘Buy’ call on the stock with a target price of ₹645 apiece. The brokerage expects H2 FY26 to be strong, led by better business growth, a pickup in margins, and stable asset quality. It also expects the bank to maintain 1% RoA in the medium term.
Bank of Baroda share price trend
The bank’s shares have made a sharp recovery recently, gaining 52% over eight months, rising from ₹190 apiece to ₹290 apiece. During this period, the stock closed in positive territory for four out of eight months.
Today’s rally has brought the stock closer to its record high of ₹300, touched in June 2024, now within just 3% of that level. On a year-to-date basis, the stock has gained 21%, and if the momentum sustains through year-end, it will mark its fifth consecutive year of positive returns.
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