Bank of Baroda hits 3-week high

Reuters | Updated on May 28, 2018 Published on May 28, 2018

Bank of Baroda Ltd rose as much as 3.7 per cent to Rs 146.50, its highest in nearly three weeks. India's third largest state-run bank on Friday posted a loss of Rs 3,102 crore in the fourth quarter from a profit last year.

CLSA expects the bank to return to profit from FY19 onwards, recovery from bankruptcy court cases could provide upside and would be key to management's ROE (return on equity) target of 10 per cent.

CLSA has cut the Target Price to Rs 170 from Rs 190 with “buy” rating.

Deutsche Bank expects strong improvement starting from FY19 and slippage to decline from over 6 per cent in FY18 to 2.2 per cent in FY19 and less than 2 per cent in FY20 along with stronger recoveries.

Morgan Stanley said it continues to expect moderation in bad loans, gradual improvement in PPoP (Pre-provision operating profit), and IFRS accounting standard implementation by April 2019 to drive double-digit ROE in FY20; keeps “overweight” rating with TP of Rs 170.

Jefferies analysts expect slippages to remain elevated in the next two quarters, but should mostly be from identified stress. It has cut the target price to Rs 161 from Rs 178 with “hold” rating.

The stock is up for sixth straight session, but down 12 per cent this year as of Friday's close.

Thirty-one of 43 brokerages rate the stock “buy” or higher, 9 “hold” and 3 “sell” or lower; their median price target is Rs 188, according to Thomson Reuters data.

The state-run lender Corporation Bank, which reported results on Saturday, rose as much as 3.6 per cent to Rs 26.25/

Published on May 28, 2018
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