Bank of Baroda share price rallies 6% in 1 week, hits record high

The bank has seen improvement in asset quality parameters with lower incremental slippages, leading to lower credit costs

Bank of Baroda share price today

 

Shares of public sector bank (PSB), Bank of Baroda (BoB), hit a record high of ₹323 on the National Stock Exchange (NSE) on Thursday, gaining 2 per cent in today's intraday trade.

 

At 09:29 AM, the Nifty 50 and Nifty PSU Bank index were up 0.01 per cent and 0.93 per cent, respectively, while the stock was the top gainer among the Nifty PSU Bank index stocks.

 

In the past one week, BoB share price has outperformed the market by soaring 6 per cent as against a 0.5\-per cent rise in Nifty 50. Further, in the past six months, the stock has rallied 32 per cent as compared to a per cent gain in the benchmark index.

 

 

What's driving Bank of Baroda stock price today?

 

Domestic credit rating agencies CareEdge Ratings and Icra have assigned 'AAA' rating with 'Stable' outlook to BoB's Green infrastructure bonds, reaffirming their existing ratings.

 

Icra expects the bank to remain self-sufficient for its capital requirements to absorb any incremental stress and for growth requirements while maintaining a capital cushion well above regulatory levels (including capital conservation buffers; CCBs).

 

For CareEdge Ratings, BoB's ratings continue to derive strength from its comfortable capitalisation levels, which support the bank fund its credit growth in the near future. Going forward, it expects the bank's advances to grow in line with the industry.

 

"In the last few years, Bank of Baroda has seen improvement in asset quality parameters with lower incremental slippages, leading to lower credit costs which, with strong credit growth, helped improve profitability. However, the bank's ability to contain incremental slippages and maintain its asset quality remains a monitorable," CareEdge Ratings said.

 

The headline asset quality indicators continue to improve and the residual vulnerable book, comprising overdue (SMA-1, SMA-2)1 and standard restructured advances, has witnessed a sustained moderation over the last few years. Given the high provision cover for the legacy stressed assets, Icra expects BoB's asset quality and solvency position to remain strong.

 

"While the bank has witnessed sustained improvement in its profitability in the past 2-3 years, it moderated slightly in 9MFY26 amid the decline in the net interest margin (NIM). Nevertheless, NIMs are expected to stabilise at the current level and gradually improve from Q1FY27, which would support profitability," ICRA said.

 

The 'Stable' outlook on the ratings factors in the strong liability profile and the expectation of steady asset quality and internal capital generation, which shall support the bank's profitability and capitalisation, it added. 

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JM Financial Institutional Securities on BoB

 

While BoB has delivered >1 per cent RoA for 14 consecutive quarters, maintaining it looks difficult going forward due to pressure on NIMs as higher growth comes at the cost of NIMs and CD yield hardens; recoveries from written off pool and treasury gains falls; declining PCR and lower standard asset provisioning makes credit cost trajectory less favourable, especially in-light of upcoming ECL transitioning, according to analysts at JM Financial Institutional Securities.

 

"Bank of Baroda continues to deliver steady growth and benign asset quality, but we see limited near-term earnings catalysts. Margin pressure, slower deposit growth, lower provisioning buffers, and reliance on recoveries reduce the quality of current profitability, while the upcoming ECL transition adds uncertainty," the brokerage said.

 

Given the balanced risk–reward and absence of strong triggers, JM FInancial said it adopts a more measured stance. Currently, the stock is quoting close to analysts’ target price of ₹325 per share.

   

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