Earnings Outlook
Bk of Baroda Jul-Sept PAT seen rising 6% to INR 45.07 bln
This story was originally published at 14:30 IST on 19 October 2024
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By Kshipra Petkar
MUMBAI - Bank of Baroda's net profit is seen rising nearly 6% on year to INR 45.07 billion in the Jul-Sept quarter, as per an average of estimates from 13 brokerage firms. As per analyst reports, the bottom line is seen in the range of INR 41.46-49.05 billion. The bank will announce its results on Friday.
Most brokerages expect net profit to largely remain flat or fall sequentially due to higher operating expenditure and provisions. As per the average of estimates of the 13 brokerage firms, the net profit is expected to rise merely 1.09% from Apr-Jun.
YES Securities said that the provisions are seen higher on a sequential basis due to some government guarantees received in Apr-Jun. In the previous quarter, the provisions were down 48.1% on year to INR 10.11 billion.
The net interest income is seen rising 9.2% on year to INR 118.25 billion, as per the average of estimates from 13 brokerage firms. On quarter, it is seen rising 1.9%. As per brokerage reports, the net interest margins will see some moderation on a sequential basis.
Kotak Insitutional Equities expects the net interest margin to decline by 10 basis points due to minor changes in the cost of funds. In Apr-Jun, the global net interest margin moderated to 3.18% from 3.27% a quarter ago. While announcing the earnings in the previous quarter, the bank had given a guidance of 3.1% with a band of 5 basis points on both sides.
As per brokerage reports, the bank's loan growth is expected to improve in the reporting quarter due to robust growth in the retail segment. As of Sept. 30, global advances of the bank were up 11.60% on year to INR 11.43 trillion and the domestic advances were up 12.5% on year to INR 9.39 trillion, as per the provisional figures released by the bank. Domestic retail advances were up 19.95% on year to INR 2.32 trillion as on Sept. 30, according to the provisional figures. The management's commentary on growth in the retail segment will be a key monitorable, brokerages said.
Global deposits of the bank grew by 9.11% on year to INR 13.63 trillion as on Sept. 30, and domestic deposits were up 7.14% on year to INR 11.50 trillion, as per the provisional figures. The credit deposit ratio of the bank is expected to rise to 83.9% in the reporting quarter from 82.0% a quarter ago, as calculated by IDBI Capital in its pre-earning report.
The asset quality is expected to improve on a sequential basis. As of Jun. 30, the gross non-performing asset ratio was at 2.88% and the net NPA ratio was at 0.69%. The bank had given an aim of 2.5% for gross NPA ratio and 0.5% for net NPA ratio for the medium term, while announcing the Apr-Jun results.
"We expect BOB (Bank of Baroda) to report better asset quality in absence of lumpy exposures to MTNL (Mahanagar Telephone Nigam Ltd.) and RINL (Rashtriya Ispat Nigam Ltd.), unlike peers," Emkay Global said in its pre-earnings report.
Brokerages expect slippages to remain broadly stable on a sequential basis. In Apr-Jun, the bank reported slippages of INR 30.18 billion, out of which it saw fresh slippages of INR 27.87 billion. The slippage ratio stood at 1.05% for the quarter ended June. Kotak Institutional Equities expects slippages of INR 40 billion, mostly driven by retail and small and medium-sized enterprises.
On Friday, the shares of Bank of Baroda closed 2.5% higher at INR 247.97 on the National Stock Exchange. Following are the Jul-Sept earnings estimates for Bank of Baroda based on estimates compiled by Informist from 13 brokerage firms:
| BROKERAGE NAME | NET INTEREST INCOME (In INR million) | NET PRO (in INR million) |
| Anand Rathi Share and Stock Brokers Ltd | 1,18,492.00 | 45,323.00 |
| Antique Stock Broking Ltd | 1,16,850.00 | 44,702.00 |
| Axis Securities Ltd | 1,17,990.00 | 43,610.00 |
| Dolat Capital Market Pvt Ltd | 1,17,705.00 | 43,010.00 |
| Elara Securities (India) Pvt Ltd | 1,14,861.00 | 45,531.00 |
| Emkay Global Financial Services Ltd | 1,18,731.00 | 46,609.00 |
| Kotak Institutional Equities | 1,17,760.00 | 41,461.00 |
| Motilal Oswal Financial Services Ltd | 1,15,260.00 | 46,039.00 |
| Nirmal Bang Equities Pvt Ltd | 1,24,161.00 | 49,054.00 |
| Nomura Equity Research | 1,20,400.00 | 45,400.00 |
| Prabhudas Lilladher Pvt Ltd | 1,19,120.00 | 44,817.00 |
| Sharekhan Ltd | 1,17,320.00 | 44,870.00 |
| YES Securities (India) Ltd | 1,18,540.00 | 45,439.00 |
| Average | 1,18,245.38 | 45,066.54 |
| Number of responses | 13 | 13 |
End
Edited by Akul Nishant Akhoury
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