ICICI Direct Initiates Buy On PSB Stock For High Returns, Gave 346.88% Return In 3 Yrs

ICICI Direct has given a buy rating to the Bank of Baroda for a target price of Rs. 220/share. The stock is likely to give a decent return of up to 19% if purchased at the current market price. Bank of Baroda is a Public Sector Bank (PSB) with a market capitalisation of Rs. 96,135.62 crore.

Q4FY23 Results

According to ICICI Direct, Strong quarter led by NIM expansion and lower credit cost. NII up 33.8% YoY at Rs. 11525 crore, NIMs up 16 bps QoQ at 3.5%. C/I down 324 bps YoY to 46%; provisions down 40.9% QoQ. PAT at Rs. 4775 crore, up 2.7x YoY, ahead of our estimate. GNPA down 74 bps QoQ to 3.79%, slippage ratio below 1%.

Buy for a target price of Rs. 220/share

According to ICICI Direct, BoB continues to demonstrate robust growth in business and earnings led by improvement in NIMs and lower credit cost. "We believe BoB will report credit growth in line with industry growth coupled with healthy margins and steady asset quality and, thus, aid RoA of ~1%. Hence, we retain our BUY rating on the stock. We value the bank at ~0.9x FY25E ABV and revise our target price to | 220/share from Rs. 200/share earlier," the brokerage has said.

Stock Outlook & Performance

The stock's current market price is Rs. 185.90/share, down by Rs 0.60 or 0.32% from its previous close of Rs. 186.50/share. Its 52 week low is Rs. 89.85/share while its 52 week high is Rs. 197.20/share, respectively.

It has given 4.17% in 1 week, and 5.42% in the past month, respectively. It has given 81.99% return in 1 year. In 3 years, it has given 346.88% positive return. In 5 years it has given 43% positive return.

About - Bank Of Baroda (BoB)

Bank of Baroda is among leading PSU banks with a global loan book of ~Rs. 9.7 lakh crore and has better operating metrics among PSBs. Pan-India presence with ~8200 branches. The bank has a meaningful presence in international operations with its JVs and subsidiaries. Total ~18% of total business comes from overseas.

Disclaimer - The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.