Bank of Baroda - Q1FY2014 Result Preview - Angel Broking

Bank of Baroda is scheduled to announce its 1QFY2014 results today. We expect the bank to report subdued NII growth of 5.3% yoy to Rs. 2,946cr. Non-interest income is expected to grow moderately by 11.7% to Rs. 861cr. Operating expenses are expected to grow at 11.9% yoy to Rs. 1,472cr. Thus the bank is expected to report modest operating profit growth of 3.6% yoy at Rs. 2,335cr. Provisioning expenses are expected to remain almost flat at Rs. 894cr (on back of higher base in 1QFY2013). Overall, we expect the bank to report flat earnings performance at Rs. 1,138cr.

At CMP, the stock trades at valuations of 0.6x FY2015E ABV. Given the recent macro developments amidst a weak macro-economic environment, we believe that the asset quality pressures for the banking are unlikely to abate as quickly as was expected earlier. Overall, we have a cautious view on the sector. Hence, we recommend a Neutral recommendation on the stock.

Source : Equity Bulls

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