Bank of Baroda shares fall over 4% in 2 sessions post Q4FY24 earnings

Shares of the country's leading state-run lender Bank of Baroda after opening gains were seen trading with a cut even as the lender posted a better show as compared to the projections in FY24.

At around 10:26 am, shares of BOB traded with a cut of 0.6 per cent at Rs 254.15 per share on the BSE, after marking an intra-day high of Rs 261.55, gaining more than 2 per cent over the previous close. Over the last two trading sessions, the stock has retreated lower by over 4 per cent at day's low.

For the quarter ended March of the FY24, the lender's net profit inched higher by over 2 per cent to Rs 4,886 crore as against Rs 4,775 crore in the same period last year. In the previous December ended quarter, the metric came in at Rs 4,579 crore.

Net interest income (NII) for the reporting quarter surged 2.3 per cent on-year to Rs 11,793 crore when compared to Rs 11,525 crore in the year-ago period.

Total provisioning at the lender during the period declined over 8 per cent to Rs 1,302 crore from Rs 1,421 crore in the same period last year.

Global Net Interest Margin (NIM) improves by 17 bps sequentially and stands at 3.27% in Q4FY24, added the company's stock exchange disclosure. NIM is one of the profitability metric to evaluate bank's performance. Zee Business research held that NIM at the lender improved on the back of seasonal recovery. Adjusted NIM is recorded at 3.15 per cent, while the fiscal year 2024 NIM is pegged at 3.18 per cent. Additionally, the research notes that the lender has made provisions to the tune of Rs 1,750 crore towards the aviation account.

The lender has logged significant improvement in its asset quality with reduction in GNPA or gross non-performing assets by 87 bps YoY to 2.92 per cent from 3.79 per cent  in Q4FY23. Also, its NNPA reduced by 21 bps YoY to 0.68 per cent in Q4FY24 as against 0.89 per cent in Q4FY23.

BOB's FY25 guidance

The lender has guided for 3.15 per cent NIM for the FY25. Slippages at the lender are projected to range between 1-1.25 per cent, while RoA or return on assets guidance has been raised to 1-1.1 per cent. Also, the lender's asset quality is expected to fortify going ahead.

What brokerages say on the lender's Q4 performance?

The brokerages and analysts maintain that the bank's core profitability came in better-than-estimates. Further, NIM is expected to remain steady for FY25-27. Also, the lender's loan portfolio is seen to log a decent growth.