The lender reported an 8% year-on-year decline in net profit to Rs 4,809 crore for the second quarter ended September 2025, compared with Rs 5,238 crore a year ago, as moderation in other income and higher expenses weighed on results.
Total income slipped to Rs 35,026 crore from Rs 35,445 crore, though interest income rose to Rs 31,511 crore from Rs 30,278 crore. Net interest income (NII) edged up to Rs 11,954 crore versus Rs 11,637 crore last year, supported by stable lending margins.
Operating profit fell 20% year-on-year to Rs 7,576 crore, but the bank’s asset quality continued to strengthen—a key comfort for investors. Gross non-performing assets (NPA) eased to 2.16% of total advances from 2.50% a year ago, while net NPAs declined to 0.57% from 0.6%.
With improved recoveries, provisions and contingencies dropped sharply to Rs 1,232 crore, compared with Rs 2,336 crore in the same quarter last year. The capital adequacy ratio rose to 16.54%, up from 16.26%, underscoring the bank’s stronger balance sheet.
Brokerage views:
YES Securities
In a post-results note, YES Securities said the bank’s “balance sheet growth, margin control and asset quality all delivered” during the quarter, even as corporate lending remained subdued.The brokerage highlighted that gross advances grew 11.9% year-on-year, with management expecting corporate loan growth to accelerate to 10–11% by the end of FY26.
YES Securities noted that the net interest margin (NIM) rose to 2.96%, up 5 basis points sequentially, aided by higher interest from income tax refunds. The margin impact from such refunds was about 6–7 bps, and management expects margins to remain “range-bound” in the coming quarter, with full-year global NIM guidance at 2.85–3%.
The brokerage also pointed to slippages staying close to a benign 1%, with total provisions falling 37% sequentially. It said a Rs 4,000 crore floating provision was created in line with expected credit loss (ECL) norms, while recoveries from technically written-off accounts were slightly below normal but expected to improve.
“We maintain ‘BUY’ on Bank of Baroda with a revised price target of Rs 360,” the brokerage said, valuing the stock at 1.1x FY27 price-to-book value for a projected return on equity (RoE) of 13.8–14.9% over FY26–FY28.
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Elara Capital
Elara Capital also reiterated a positive stance, calling the results “broadly in line with expectations” as “better NII and lower credit costs offset weaker other income.”
The brokerage noted that loan growth stood at 12% year-on-year, while deposit growth lagged slightly below 10%. It said the credit cost fell to 29 basis points, supported by corporate recoveries, and that slippages were down sequentially at Rs 3,060 crore, or 1.1% of loans.
“Elara maintained its ‘BUY’ rating and raised the target price to Rs 326, citing “resilient asset quality, steady margins and an RoE guidance of 12–13%.” The brokerage, however, cautioned that the “rerating is expected to be gradual,” noting that the ECL transition impact of 22–25 bps was slightly above prior estimates.
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