Market Prediction

Long Term Stocks To Buy With In Dept Research For 10th March 2023

Short Term Buy

Buy BANK OF BARODA (BOB) @166
Target 1- 203
Target 2- 238
Stoploss-138
Upside Potential - 40% Appox
Duration 3-6 Months

Our Research

✓ BOB appears to be well capitalized for incremental growth opportunities with CET-I ratio healthy at ~11%, to be driven by the Retail loans. Business growth was healthy with loans growing 6.5% QoQ and margins expanding 4bp QoQ (24bp QoQ on an adjusted basis) in Q3FY23.
✓ Asset quality continues to improve with NNPA at less than 1%. A lower SMA book and controlled restructuring provide further comfort on asset quality. The bank reported a decline in the GNPA/NNPA ratio by 78bp/17bp QoQ, respectively, while PCR stood stable at ~79% in Q3FY23
✓ Management’s focus is to grow retail loan at a faster rate and aims to increase it’s mix from 25% to 35%. Overall, we estimate FY25 RoA/ RoE of 1.1%/15.3.