Bank of Baroda Q2 results preview: Here's what key brokerages expect

Bank of Baroda Q2 preview: Treasury income is projected just at Rs 100 crore, down 92 per cent YoY from Rs 1,221 crore.

Bank of Baroda Q2 preview: Government-owned Bank of Baroda (BoB) may report a double digit growth in bottomline when it announces its July-September quarter (Q2FY23) results on Saturday, November 5.

Analysts, however, said it's pre-provision operating profit, and net interest income (NII) could remain tepid sequentially due to lower other income.

Thus, operating expenditure (opex) trajectory, particularly employee costs; credit costs; movement in the lender's watch-list; and stressed pool will be the key focus areas for investors, they added.

Meanwhile, here's what key brokerages expect from BoB's Q2 result:

HSBC

The global brokerage expects BoB's net profit to come in at Rs 2,681.1 crore, up 28 per cent year-on-year (YoY)/24 per cent quarter-on-quarter (QoQ), led by 25 per cent YoY/7 per cent QoQ increase in net interest income (NII) at Rs 9,473.3 crore.

PAT was Rs 2,087.9 crore in Q2FY22, and Rs 2,168.1 crore in Q1FY23.

JPMorgan

This global brokerage expects PAT to come in at Rs 2,890 crore, up 38 per cent YoY/33 per cent QoQ, even as operating profit is expected to stay weak.

PPoP is seen at Rs 5,760 crore, up 27 per cent YoY/2 per cent QoQ, with just 23 per cent YoY/5 per cent QoQ rise in NII at Rs 9,270 crore.

Motilal Oswal Financial Services

The domestic brokerage anticipates NII growth of 22 per cent YoY at Rs 9,240 crore, and other income contraction of 39 per cent YoY at Rs 2,200 crore. Overall, total income is seen at Rs 11,440 crore for the quarter under review.

Moreover, with operating expenses at Rs 5,640 crore, operating profit is pegged at Rs 5,800 crore, up 2.4 per cent YoY.

As regards loan growth, MOFSL said the credit book at the end of Q2 may stand at Rs 8.23 trillion, up 19 per cent YoY. Deposits, too, may grow 10 per cent YoY to Rs 10.57 trillion.

Prabhudas Lilladher

This brokerage, too, has a paltry NII expectation of Rs 8,971 crore, up 19 per cent YoY/1.5 per cent QoQ. It, however, expects net interest margin (NIM) to expand to 3.04 per cent from 2.85 per cent YoY/3.02 per cent QoQ.

That said, it cautions that operating profit may fall 8 per cent YoY to Rs 5,204.8 crore. PPoP was Rs 5,669.6 crore last year, and Rs 4,527.5 crore in Q1FY23.

Kotak Institutional Equities

The brokerage expects gross slippages at around 2 per cent (Rs 4,500 crore), which will be offset by a meaningful quantum from recoveries, and upgrades from the retail and SME portfolios.

It also expects provisions to fall 34 per cent YoY, but rise 8 per cent QoQ, to Rs 1,816 crore.

"We expect to hear commentary to be quite positive on  asset quality. Expect more discussions on RoE and loan growth for the quarter," the brokerage's report said.

Meanwhile, treasury income is projected just at Rs 100 crore by the brokerage, down 92 per cent YoY from Rs 1,221 crore. This would be higher than sequential treasury loss of Rs 773 crore.