Shareholders of Bank of Baroda are ecstatic with its stellar performance over the last one-year as the stock witnessed a surge from ₹101.55 apiece to the current trading price of ₹183.70, resulting in a substantial return of 80.90%. With its fabulous performance, the stock is currently positioned as the second-best performer within the Nifty Bank index.
Notably, after hitting a 52-week low of ₹89.85 in June last year, the shares of the PSU bank demonstrated a consistent upward trend, recording positive monthly returns for six consecutive months until December 2022, rallying 119.50% to hit a six-year high of ₹197.20 apiece.
The remarkable performance of the stock has also led to a substantial gain of 126% in CY22. At current levels, the scrip is trading 104.45% higher than its 52-week low.
The stock's impressive performance can be attributed to the bank's consistent growth in net profit throughout each quarter of the fiscal year 2023. In the latest March quarter, the bank demonstrated the highest net profit growth among its peers.
It reported a 168.40% YoY rise in its net profit to ₹4,775 crore for Q4FY23. The positive momentum continued from the previous quarters, with a net profit of ₹2,168 crore in Q1 and ₹3,313 crore in Q2. Building on this success, Q3 showcased further improvement, with a net profit of ₹3,853 crore.
The bank's net interest income during the March quarter showed a significant improvement, expanding by 33.8% YoY to ₹11,525 crore, while its net interest margin improved to 3.53% from 3.07% in the year-ago quarter.
On the asset quality side, the bank displayed solid improvement in its gross non-performing assets, which declined to 3.79% in Q4, a drop of 282 basis points from 6.61% registered in Q4 FY22. While the net NPA came down to 0.89% in Q4 compared to 1.72% in Q4 FY22, a drop of 83 basis points.
Domestic brokerage firms have stated that the bank has reported healthy performance across all key parameters, aided by a rise in other income and a fall in provisions.
In its latest note, Motilal Oswal has maintained its 'buy' call on the stock with a target price of ₹240 apiece. This target price indicates a new all-time high for the stock. The stock had previously hit an all-time high of ₹215 apiece in January 2015.
Further, the bank saw its FII holdings reach an all-time high of 10.90% in the March quarter. In the preceding December quarter, FIIs owned an 10% stake in the bank. While foreign investors continue to bet on the bank, DIIs have trimmed their stake to 17% in Q4 FY23 from 18% in Q3 FY23.
31 analysts polled by MintGenie on average have a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.