BoB: No more merger-led constraints, power of three becoming more evident

Post results, analysts have raised Bank of Baroda's FY22 estimated price to book to 0.5x from 0.3x. This is the first valuation upgrade in nine years

Bank of Baroda’s December quarter (Q3) results surprised the Street on many counts. Its gross bad loan ratio, without the apex court’s stay on asset classification, at 9.4 per cent and loan growth at 6 per cent year-on-year (YoY) moved the needle favourably. Analysts have raised their FY22 earnings estimates by 12-22 per cent after the results.

The bank posting net profit of Rs 1,061 crore, as against a loss the year-ago quarter, was also positive. With this, it’s evident that much of the merger-led constraints are behind the bank, and benefits of the merger with Vijaya Bank and Dena