Bank of Baroda drew fresh attention from brokerages after the PSU lender posted its highest-ever quarterly profit and crossed Rs 30 lakh crore in global business during the March quarter. Brokerages largely acknowledged the stronger operating performance in Q4 but at the same time, several reports pointed to pressure on margins, elevated credit-deposit ratio and uncertainty linked to the Expected Credit Loss framework.
HDFC Securities retained its ‘Buy’ call on the stock, while JM Financial maintained its Add recommendation after revising estimates. The bank reported net profit of Rs 5,616 crore for Q4FY26, up 11.2% year-on-year from Rs 5,048 crore in Q4FY25, while global advances climbed to Rs 14,29,879 crore in March quarter from Rs 12,30,461 crore a year earlier.
HDFC Securities on Bank of Baroda: ‘Buy’
HDFC Securities maintained its ‘Buy’ rating on Bank of Baroda with a revised target price of Rs 310 from Rs 320 earlier, implying an upside of nearly 17.4% from the current market price of Rs 264 mentioned in the report. The brokerage said the bank’s March quarter earnings reflected mixed trends, though stronger core fee income and tight control over funding costs helped offset pressure on loan yields. HDFC Securities noted that net interest margins improved sequentially to 2.9% during Q4FY26 from 2.79% in Q3FY26 even as loan yields weakened by 10 basis points quarter-on-quarter.
The brokerage pointed out that domestic deposits rose to Rs 14,01,290 crore in March 2026 from Rs 12,42,169 crore in March 2025, while domestic advances increased to Rs 11,69,458 crore from Rs 10,21,112 crore during the same period. It also said wholesale loans and gold loans remained key contributors to credit growth in the quarter.
HDFC Securities said employee expenses declined sharply by 21% quarter-on-quarter, helping the bank bring its cost-to-income ratio down to 44.9% in Q4FY26 from 52.1% in Q3FY26. The brokerage also noted that Bank of Baroda continued to deliver stronger cross-cycle return ratios than many public sector peers because of its customer franchise and stable retail business mix.
At the same time, the brokerage remained cautious on the lender’s elevated loan-to-deposit ratio of 85%, which stood above several other public sector banks. It also pointed to softer net interest margins as a risk in the coming quarters despite the latest improvement.
“Despite its relatively softer NIMs, BOB has consistently delivered better cross-cycle return ratios than peers, largely on the back of superior customer franchise,” HDFC Securities said in its report.
The brokerage further added that the bank “needs to exercise better pricing power in this segment to achieve sustainably higher operating profitability.”
HDFC Securities also highlighted that gross non-performing assets declined to 1.89% in Q4FY26 from 2.26% in Q4FY25, while net non-performing assets eased to 0.45% from 0.58% over the same period. Provision coverage ratio with technical write-offs improved to 93.94% in March 2026 from 93.29% a year ago.
The brokerage expects Bank of Baroda’s earnings per share to grow by 10% in FY27 and 6% in FY28, supported by lower provisioning requirements and stable operating trends.
JM Financia Institutional Securities on Bank of Baroda: ‘Add’
JM Financial retained its ‘Add’ rating on Bank of Baroda and raised its target price to Rs 290 from Rs 280 earlier, implying an upside of 9.8% from the prevailing market price of Rs 264 cited in the report. The brokerage said the bank delivered a good quarter with profit growth ahead of its expectations despite multiple one-off adjustments during the period.
The brokerage said loan growth remained healthy with advances rising 16% year-on-year and 6% quarter-on-quarter, driven by continued traction in retail, agriculture and Micro, Small and Medium Enterprises lending. Deposits increased 12% year-on-year and 7% quarter-on-quarter, supported by healthy current account accretion.
The brokerage noted that the bank’s CASA ratio improved during the quarter, while net interest margin on a calculated basis expanded by around 8 basis points sequentially to nearly 2.69%. It also said lower employee expenses supported profitability during the quarter even after the bank created additional floating provisions worth nearly Rs 1,500 crore.
“Bank of Baroda reported a good Q4FY26 performance, with PAT growing 11% YoY and 11% QoQ, driven by healthy operating performance,” JM Financial Institutional Securities said in its report.
The brokerage also stated that “while the bank has delivered above 1% RoA for 15 consecutive quarters, maintaining it will be key factor to monitor.”
JM Financial said pressure on margins due to competition for deposits, moderation in recoveries and uncertainty around the Expected Credit Loss transition remained areas to watch. The brokerage added that management expects return on assets to stay above 1% in FY27 and guided for loan growth of 12% to 14% during the year.
The report also mentioned that Bank of Baroda was evaluating an equity capital raise of nearly Rs 8,500 crore up to FY28. JM Financial Institutional Securities said the bank’s valuation continued to provide support despite concerns around future profitability trends.
The brokerage expects deposits to rise to Rs 21,01,800 crore by FY28 from Rs 16,48,487 crore in FY26, while net advances are projected to increase to Rs 18,48,294 crore from Rs 14,09,094 crore during the same period.
Conclusion
Brokerage commentary following Bank of Baroda’s March quarter numbers largely centred on the bank’s steady credit growth, improving bad-loan metrics and resilient profitability. Both HDFC Securities and JM Financial Institutional Securities acknowledged that the lender managed to post stronger operating numbers despite pressure on yields and rising competition for deposits.
Even so, both reports also pointed to future margin pressure and the impact of the Expected Credit Loss framework as key factors that could influence earnings performance over the next few quarters.
Disclaimer: The analysis and price targets featured in this report are based on brokerage research and do not constitute an offer, solicitation, or recommendation to buy, sell, or hold any security. Investing in the equity markets involves significant risk; please consult a SEBI-registered investment advisor before making any financial decisions based on these projections.
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