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Research
Bank of Baroda - Q4FY20 Result Update - ICICI Securities
Posted On : 2020-06-25 12:17:25( TIMEZONE : IST )
Bank of Baroda (BoB) reported a mixed set of Q4FY20 numbers led by strong business growth and reduced opex while higher moratorium at 65% was a dampener. The bank has provided Rs. 810.6 crore as Covid provision. The management expects the moratorium to reduce to 35% by August 2020. Higher provision at Rs. 6844 crore led to an improvement in PCR (including technical write-off) from 77.77% in Q3FY20 to 81.33% in Q4FY20. Fresh slippages slumped 62% QoQ to Rs. 4485 crore, with slippage ratio improving from 6.78% in Q3FY20 to 1.94% in Q4FY20. On the back of higher moratorium, asset quality improved with GNPA ratio declining ~103 bps QoQ to 9.4%. On an absolute basis, GNPA, NNPA were at Rs. 69381 crore, Rs. 21576 crore, respectively. Watchlist was at Rs. 12500 crore, up 19% QoQ, due to addition of an international account with exposure of Rs. 2000 crore and inclusion of overdue exposure.
Valuation & Outlook
Business growth is expected to remain moderate with MSME showing some traction as the bank intends to avail government's credit guarantee scheme. Out of Rs. 50000 crore eligible for the ECLGS scheme, the bank has sanctioned Rs. 6000 core. With four quarters past merger, fear of delinquency shock is allayed making the bank relatively better placed after SBI. Though downtrend in moratorium remains positive, extent of slippages needs to be seen ahead. A sharp correction in stock price poses elevated dilution risk in case of capital raising. Subdued RoE ahead led us to value the bank at 0.5x FY22E ABV and arrive at a target price of Rs. 58. We maintain HOLD rating.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_BoB_Q4FY20.pdf
Shares of BANK OF BARODA was last trading in BSE at Rs.51.6 as compared to the previous close of Rs. 50.45. The total number of shares traded during the day was 6986304 in over 45026 trades.
The stock hit an intraday high of Rs. 55 and intraday low of 51.2. The net turnover during the day was Rs. 371156431.
