Bank of Baroda shares post biggest gain in 8 months; what Citi, HSBC, UBS say after Q2

Shares of Bank of Baroda Ltd rose as much as 5.15 per cent to hit an intraday high of Rs 250.89 on the NSE on Monday, November 2, after the state-owned lender reported better-than-expected results for the September quarter of FY27.

The bank's net profit and net interest income (NII) exceeded Zee Business estimates. Its asset quality also improved during the quarter.

At the time of reporting, Bank of Baroda shares were trading at Rs 244.93, up 2.65 per cent from the previous close of Rs 238.60.

The bank reported a 35.8 per cent year-on-year (YoY) increase in net profit to Rs 6,532 crore in Q2 FY27, compared with Rs 4,810 crore in the corresponding quarter last year. The figure was higher than the Zee Business estimate of Rs 5,290 crore.

On a quarter-on-quarter (QoQ) basis, net profit surged 411.1 per cent from Rs 1,278 crore in Q1 FY27.

Bank of Baroda Q2 results: NII rises 9%

The bank's net interest income (NII), which is the difference between interest earned and interest expended, increased 9 per cent YoY to Rs 13,026 crore against Rs 11,954 crore in the year-ago quarter.

The figure was higher than the Zee Business estimate of Rs 12,370 crore. On a sequential basis, NII rose 4 per cent from Rs 12,524 crore in Q1 FY27.

Interest income increased 5.6 per cent QoQ to Rs 35,085 crore. Interest expenses rose 6.6 per cent to Rs 22,059 crore.

Bank of Baroda Q2 FY27: Non-interest income nearly doubles

The bank's non-interest income increased 98.3 per cent QoQ to Rs 6,881 crore from Rs 3,470 crore in the preceding quarter.

Operating income rose 24.5 per cent to Rs 19,907 crore from Rs 15,995 crore. Operating expenses increased 7.7 per cent to Rs 8,477 crore.

Operating profit, however, improved 40.6 per cent sequentially to Rs 11,430 crore from Rs 8,127 crore.

Bank of Baroda share price: What brokerages say after Q2 results

Brokerages remained largely positive on Bank of Baroda following its September quarter performance, with Citi and HSBC retaining or upgrading their positive ratings.

Citi on Bank of Baroda: Citi maintained its 'Buy' rating on the stock with a target price of Rs 310.

The brokerage said treasury gains boosted return on assets and helped fund additional prudential buffers. It noted that NIM remained resilient despite CASA dilution due to FCNR deposits and pressure on overseas margins.

Citi expects margins to benefit in the second half of FY27 from repricing of repo-linked and corporate loans. It also highlighted broad-based growth across the retail, agriculture and MSME (RAM) segments and said the bank had raised its credit growth guidance.

HSBC on Bank of Baroda: HSBC upgraded the stock to 'Buy' from its earlier rating and raised the target price to Rs 284 from Rs 276.

The brokerage said core profit beat estimates, supported by stronger fee income and lower underlying credit costs. It expects improving NIM and loan growth to support a return on assets of around 1 per cent and return on equity of 13 per cent.

HSBC also raised its FY27-FY29 earnings per share (EPS) estimates by 10.7-16.7 per cent. However, it flagged the transition to the expected credit loss (ECL) framework as a key risk.

UBS on Bank of Baroda: UBS maintained its 'Buy' rating but cut its target price to Rs 300 from Rs 310.

The brokerage noted that Q2 NII stood at Rs 13,000 crore, up 4 per cent QoQ, while NIM declined 3 basis points to 2.74 per cent. It also highlighted an improvement in gross NPA to 1.78 per cent.

UBS said the bank had raised its FY27 loan growth guidance to 13-15 per cent and deposit growth guidance to 11-13 per cent. It retained its NIM guidance at 2.75-2.95 per cent.