Shares of Bank of Baroda rose over 2% after Q4 results. Should you buy, sell or hold?

Shares of Bank of Baroda in the March quarter were Rs. 5,616 crore on the BSE on Monday after reporting a consolidated net profit of Rs. 270 to their intraday high of over 2%, up from Rs. 5,048 crore, registering an increase of 11.2 percent.

The state-run lender’s net interest income (NII) rose 9% year-on-year to Rs. 12,494 crore as compared to Rs. 11,494 crores. However, during the quarter under review, non-interest income declined by 16% to Rs. 3,967 crore as against the Rs. 4,735 crores.

Asset quality improved during the quarter, with gross NPA falling 37 basis points to 1.89% from 2.26% in Q4FY25. Net NPAs also improved to 0.45% from 0.58%, a decline of 13 basis points year-on-year.

Bank of Baroda Shares: Buy, Sell or Hold?

Citi maintained its “Buy” rating on Bank of Baroda’s share price, with a target price of Rs. 360 reduced to Rs. 340, which was over 29%. Management has raised FY27 loan growth guidance to 12-14%. Citi highlighted that slippages increased sequentially, mainly due to stress in the MSME and agriculture segments. The brokerage has cut its earnings estimates for the bank, citing expectations of structurally softer core NIMs going forward.

Motilal Oswal Rs. Retained its “Neutral” rating on Bank of Baroda’s stock with a target price of 300, indicating an upside potential of 14%. The brokerage said Bank of Baroda performed well in the March quarter, with net interest margin improving by 10 basis points quarter-on-quarter, supported by interest income from income tax refunds. Motilal Oswal noted that the cost of funds appears to have largely bottomed out, while further support is expected from improving yields.

While Motilal Oswal does not see any major concerns on asset quality, it has raised borrowing costs mildly by 50-60 basis points from 40 basis points in FY26, taking into account the ECL transition.

Elara Capital maintained its “Accumulate” rating on Bank of Baroda while setting a target price of Rs. 345 (19% upside) to Rs. 314 did. The brokerage said the bank’s core operating trends remained stable in the March quarter, though earnings were supported by multiple one-off items. Brokerages remain cautious on the bank’s NIM trajectory due to liquidity constraints and high credit-deposit ratios. However, it added that the recent underperformance in the stock has improved the risk-reward profile relative to PSU banking peers, with any re-rating likely dependent on continued delivery of core profitability.

Separately, Goldman Sachs has included Bank of Baroda in its basket of 12 “alpha” ideas, which include large and liquid stocks where foreign investor ownership and positions remain relatively light, with valuations considered fair with the potential for outperformance when market sentiment improves.

Goldman Sachs noted that the state-run lender is trading at about seven times forward earnings, while foreign institutional investors have about 27% of free float after a modest decline during the previous quarter.

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