Shares of Bank of Baroda surged by 4 per cent to Rs 255 per share on October 4, after the public sector lender released its business update for the second quarter of FY25.
The public sector undertaking (PSU) bank, reported a 10.23 per cent year on year growth in its global business to Rs 25.06 trillion.
Further, the bank’s global advances grew by 11.60 per cent Y-o-Y to Rs 11.43 trillion as of 30th September 2024. On the other hand, domestic advances soared by 12.51 per cent to Rs 9.39 trillion.
In terms of deposits, the global deposits jumped 9.11 per cent Y-o-Y to Rs 13.63 trillion in Q2FY25 from Rs 12.49 trillion in Q2FY24, while domestic deposits scaled 7.4 per cent to Rs 11.50 trillion on a Y-o-Y basis from Rs 10.74 trillion.
The retail segment of the domestic deposits also increased by 19.9 per cent to Es2.32 trillion, compared with 1.93 trillion in the same period last year.
Apart from the business update for Q2, the bank also unveiled its plans to offload its Oman operations to Bank Dhofar as part of a foreign operation rationalisation strategy. The total business of BoB in Oman stands at 113.35 million Omani Rial (OMR) with a net worth of OMR 25.54 million
BoB’s share price underperformed the market as it has gained only 7.7 per cent year to date while soaring over 18.6 per cent in the last one year. In comparison BSE Sensex has risen 14.6 per cent year to date and 27 per cent in a year.
Analysts See A Siverlinning
Following this strong performance, Citi analysts reaffirmed their positive outlook on the stock, issuing a ‘buy’ recommendation with a target price of Rs 300 per share. This target suggests a potential upside of 17 per cent from the current levels. According to Citi, the growth in global advances exceeded their estimates, while the sequential deposit growth was also solid, contributing to the positive sentiment.
Morgan Stanley also weighed in on the business update, maintaining an ‘equal-weight’ rating on the stock and setting a target price of Rs 265 per share. The firm highlighted the bank’s strong overseas loan book and healthy deposit growth as key factors behind its positive assessment.
In addition to its quarterly business performance, Bank of Baroda’s decision to offload its Oman operations is part of a broader effort to rationalise its foreign operations. The total business of Bank of Baroda in Oman amounts to OMR 113.35 million, with a net worth of OMR 25.54 million.
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