Earnings Outlook
Bank of Baroda PAT seen falling 3% YoY on low NII growth
This story was originally published at 16:18 IST on 3 May 2025
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By Kshipra Petkar
MUMBAI – Bank of Baroda is expected to report a fall in its net profit for the March quarter due to low growth in net interest income, according to analysts. The bottom line is expected to slip 3.1% on year to INR 47.34 billion for the latest quarter, according to the average of estimates from 14 brokerages. The net profit estimates range from INR 40.69 billion to INR 51.83 billion.
Prabhudas Lilladher gave the lowest net profit estimate as it expects provisions going back to "normalised levels", the brokerage said in its report. In the previous quarter, the provisions had risen 62.4% on year to INR 10.82 billion.
The net interest income of the public sector bank is seen falling marginally to INR 117.05 billion, according to the average of estimates from 14 brokerages. In the previous quarter, the bank's net interest income had grown 2.8% on year to INR 114.17 billion. The net interest income is expected to moderate because of a slowdown in loan growth and fall in net interest margins.
The net interest margin of the lender is expected to moderate by 2-4 basis points on a sequential basis due to a fall in yield on advances, according to brokerages. In the previous quarter, the bank's margin was 2.94%, down from 3.10% in the September quarter. The bank had lowered its guidance for net interest margins for 2024-25 (Apr-Mar) to 3.00-3.10% from 3.10-3.20%.
According to the provisional figures released by the bank, global advances were up 13% on year and deposits had risen 10.3% as on Mar. 31. The bank had maintained their guidance of 9-11% growth in deposits and 11-13% in advances in the previous quarter, in line with estimates provided by other banks.
The asset quality of the bank is expected to improve marginally, as per analysts. "We expect curtailed slippages, which with steady recovery and upgrade will likely help GNPLs (gross non-performing loans). The recovery trend could spring positive surprise," Elara Securities said in its pre-earnings report.
On the other hand, Emkay Global expects slippages to inch up on a sequential basis due to rise in non-performing agricultural loans, consequently leading to a rise in provisions.
In the previous quarter, non-performing assets from the agriculture segment formed 32% of the total domestic non-performing assets, lower than 32.5% reported in Jul-Sept. The gross non-performing assets ratio was 2.43% as on Dec. 31 and the net non-performing assets ratio was 0.59%. Credit costs are likely to remain at the current levels of 0.30%, according to analysts.
The bank will announce its earnings on Tuesday. Shares of the bank on Friday closed 0.5% lower at INR 248.61 on the National Stock Exchange. The stock has risen nearly 9% since the announcement of its December quarter earnings on Jan. 18.
Following are the Jan-Mar earnings estimates for Bank of Baroda based on reports from 14 brokerage firms in the descending order by the estimate of net profit:
Brokerages | Net Interest Income (in INR million) | Net Profit (in INR million) |
Sharekhan | 117,330.00 | 51,830.00 |
PhillipCapital (India) | 117,065.00 | 50,865.00 |
Elara Securities (India) | 118,367.00 | 49,913.00 |
Equirus Securities | 115,005.00 | 49,369.00 |
Emkay Global Financial Services | 117,653.00 | 49,014.00 |
Motilal Oswal Financial Services | 116,590.00 | 48,986.00 |
YES Securities (India) | 117,063.00 | 47,912.00 |
Dolat Capital Market | 117,023.00 | 47,865.00 |
Anand Rathi Share and Stock Brokers | 117,551.00 | 47,323.00 |
IIFL Capital Services | 116,500.00 | 47,200.00 |
Nomura Equity Research | 117,700.00 | 46,000.00 |
JM Financial Institutional Securities | 113,341.00 | 43,269.00 |
Nirmal Bang Equities | 120,139.00 | 42,547.00 |
Prabhudas Lilladher | 117,353.00 | 40,685.00 |
Average | 117,048.57 | 47,341.29 |
End
Edited by Subhojit Sarkar
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