Bank of Baroda (BOB IN) – Q3FY26 Result Update – Profitable growth remains a challenge – BUY
Published on 31 Jan 2026
BOB saw a soft quarter; core PAT was ahead of PLe due to lower provisions and higher TWO recovery. However, earnings quality was a bit weak due to (1) 5-10bps fall QoQ in reported core NIM (stable to improving NIM for peers) (2) 5% QoQ decline in core fees and (3) reduction in investments and LCR to book treasury income and (4) 192bps fall in PCR to 72% despite lower net slippages. While bank guided to loan/deposit growth of 11-13% and 10%, we are watchful since LDR has touched 85.7%. We are also monitoring NIM given it has been surprising negatively since the last few quarters due to preference for growth. Asset quality continues to remain a silver lining and ECL impact could be 60bps one-time and 18bps additional each year. We keep multiple at 1.0x but raise TP to Rs320 from Rs300 as we roll forward to Mar’27 ABV. Retain ‘BUY’.
