Bank of Baroda shares fall as analysts downgrade stock after Q3 results

Shares of Bank of Baroda Ltd. extended their decline on Monday after the stock saw multiple downgrades, following a miss on net interest income (NII) estimates in the third quarter of the financial year 2026 (Q3-FY26).

 

The lender's stock fell as much as 2.7 per cent during the day to ₹272 per share, a day after falling 7 per cent. Bank of Baroda stock pared losses to trade 2.2 per cent lower at ₹273.4 apiece, compared to a 0.06 per cent advance in Nifty 50 as of 10:45 AM. 

 

Shares of the company fell for the fourth straight session and currently trade at 2.7 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 8 per cent this year, compared to a 4.8 per cent advance in the benchmark Nifty 50. Bank of Baroda has a total market capitalisation of ₹1.4 trillion.   CATCH STOCK MARKET UPDATES TODAY LIVE

Bank of Baroda Q3 results 

The lender's net profit rose 4.5 per cent year on year (Y-o-Y) to ₹5,055 crore in Q3 FY26, aided by lower provisioning and a marginal rise in non-interest income. NII was flat at ₹11,800 crore in the quarter ended December 2025, compared with ₹11,786 crore a year ago.

 

Net interest margin (NIM) declined by 25 basis points to 2.79 per cent in Q3 FY26 from 3.04 per cent a year earlier. Sequentially, NIMs fell from 2.96 per cent in the quarter ended September 2025 (Q2 FY26).

Analysts on Bank of Baroda earnings 

JM Financial said the road ahead appears challenging for the bank, despite it delivering a return on assets of over 1 per cent for 14 consecutive quarters. The brokerage said sustaining this performance could be difficult due to pressure on net interest margins as higher growth comes at the cost of margins and deposit yields harden.

 

JM Financial also flagged lower recoveries from the written-off pool and a decline in treasury gains. In addition, falling provision coverage ratios and lower standard asset provisioning could make the credit cost trajectory less favourable, particularly in light of the upcoming expected credit loss transition. Consequently, it downgraded the stock to 'Add' and cut its target price to ₹325 per share.   ALSO READ | Delhivery up 5% in 2 days post Q3; analysts see strong growth outlook 

Antique Stock Broking said the bank reported a miss on NII, while profit after tax exceeded expectations, aided by lower credit costs. Analysts cut their margin estimates for FY27-FY28 by 15-17 basis points due to the pending transmission of the marginal cost of funds-based lending rate. Antique Broking downgraded the stock to 'Hold' from 'Buy' and lowered its target price to ₹315 per share from ₹325.

 

Motilal Oswal also said that the lender reported weak revenue due to pressure on net interest margins, although profit after tax was better than estimates, aided by lower provisions.

 

The brokerage noted that slippages remain under control, leading to an improving credit cost trajectory. It expects credit costs of around 40 basis points in FY26 before rising towards 60 basis points over FY27-FY28, largely due to the expected credit loss transition. Motilal Oswal added that it has raised its loan growth estimates but slightly trimmed its net interest margin projections, resulting in a 4.3 per cent and 2.8 per cent increase in earnings estimates for FY27 and FY28, respectively.

 

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