BoB stock zooms nearly 10% on strong Q1 results

By: |
Mumbai | Updated: Jul 31, 2018 1:56 AM

The shares of Bank of Baroda gained nearly 10% on Monday and hit a three-and-a-half-month high after the lender posted better-than-expected results in April-June quarter.

BoB stock zooms nearly 10% on strong Q1 results

The shares of Bank of Baroda gained nearly 10% on Monday and hit a three-and-a-half-month high after the lender posted better-than-expected results in April-June quarter.

Shares of the company soared 9.92% to close at Rs 151.75 on the BSE. During the day, it zoomed 10.61% to Rs 152.70. On NSE, the stock jumped 10.37% to settle at Rs 152.15.

The state-run lender’s market valuation moved up by Rs 3,624.71 crore to Rs 40,145.71 crore.

Bank of Baroda reported a more than two-fold jump in first-quarter net profit at `528.6 crore against a Bloomberg consensus estimate of Rs 166.4 crore.

Kotak Institutional Equities in a note to investors said the bank’s key strengths include a strong liability franchise, comfortable capital position and high coverage ratio.

“Recovery from NCLT accounts will boost earnings going ahead,” the note said.

“BoB’s recent business performance broadly reflects good progress towards improving the growth trends and expected improvement in profitability of the bank. We see RoEs improve sharply from current levels in the next two years through the long-term RoEs are still uncertain as a lot is contingent on the sustainability of the changes effected by the current management,” the note added.

Siddhartha Rastogi, director of Ambit Asset Management, said this was a turnaround quarter for Bank of Baroda. And some of the initiatives like giving the mandate for the exit of AMC business, shutting down the foreign branches and subsidiaries where you have relatively poor control, exiting non-core assets, and becoming a pure play bank with a focus on distribution and net interest income is paying out.

When asked about his outlook for the stock, Rastogi said, “Their RoE is far superior to any other PSU Bank, and the stock is available at 0.9 times its book value of FY19 estimates, and hence it is a good buy. I expect the RoE to improve around 15-16% in FY 20.”

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Rupee could start appreciating from current levels; two stocks to benefit from a stronger rupee
2As COVID-19 lockdown puts brakes on smartphone sales, brokerages bet on buying Bharti Airtel stock
3Softbank share price rally delivers Masayoshi Son’s clear response to critics after WeWork disaster