Bank of Baroda - 3QFY13 Results - Nirmal Bang

Bank of Baroda (BoB) reported net earnings of Rs10.1bn for 3QFY13 amid sustained pressure on its asset quality, with GNPAs (gross non-performing assets) and NNPAs (net non-performing assets) rising because of fresh slippage amounting to Rs45bn for the 9MFY13 period from its loan exposure to large and mid-sized companies.

The 3QFY13 numbers under Mr. S.S. Mundra, the new chairman, witnessed conservative provisioning, and BoB has given guidance of sustained stress on quantitative lending growth and asset quality spilling over to another couple of quarters, thereby indicating likely overhang on its stock price.

We have retained our Sell rating on the stock but increased its target price to Rs623 from Rs570 earlier.

Source : Equity Bulls

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