Shares of Bank of Baroda dipped 2% to Rs 242 on the BSE on Monday after the lender reported a 72% year-on-year (YoY) drop in net profit to Rs 1,278 crore for the first quarter of FY27, absorbing a one-off exceptional item of $600 million. Multiple brokerages downgraded their ratings and slashed target prices for the stock after the earnings print.

Bank of Baroda on Friday reported that its net interest income (NII) rose 9% YoY to Rs 12,524 crore during the April-June quarter of FY27, as against Rs 11,435 crore in the year-ago period. Operating income fell slightly to Rs 15,995 crore, while operating profit dropped 1% YoY to Rs 8,127 crore.

Total provisions and contingencies rose to Rs 6,323 crore, mainly due to the exceptional item. The bank’s global advances grew 17% YoY to Rs 14.16 lakh crore, while global deposits rose 14% YoY to Rs 16.33 lakh crore. Global net interest margin stood at 2.77% for Q1 FY27, compared with 2.91% a year earlier and 2.89% in Q4 FY26. Domestic NIM stood at 2.93%. Cost of deposits declined to 4.66%, down 12 basis points sequentially and 39 basis points year-on-year.

Bank of Baroda’s asset quality improved from a year earlier, though bad loan ratios rose sequentially. Gross NPA ratio stood at 1.99% in Q1 FY27, compared with 2.28% in Q1 FY26 and 1.89% in Q4 FY26. Net NPA ratio declined to 0.50% from 0.60% a year earlier, but was higher than 0.45% in the March quarter.

JM Financial on Bank of Baroda share price

JM Financial said Bank of Baroda reported a mixed Q1 earnings print, with a 72% plunge in profit due to an exceptional charge pertaining to the NMC Health litigation settlement. Excluding this, PAT would have grown 22% YoY, translating to an RoA of 1.1%, it noted.

Operating performance was further weighed down by weak core fee income, declining 22% YoY and missing the brokerage’s estimate by 36%, although sharply lower provisions, aided by release of standard asset provisions, supported profitability, JM Financial said. It added that advances growth came as the bank consciously ran down corporate exposures.
Sustaining RoA above 1% remains a key variable to monitor amid potential NIM pressure, continued reliance on recoveries and potentially higher credit costs following the upcoming ECL transition, the brokerage said. It cut its EPS estimates for FY27 by 5% and FY28 by 1% to factor in the NMC litigation charge, higher credit costs and moderation in fee income.
JM Financial maintained its ‘Add’ rating on the shares of Bank of Baroda, but reduced its target price to Rs 270 apiece from Rs 290. The latest target implies a 10% upside from the previous closing price of Rs 246.45 on NSE.
Also read | Bank of Baroda Q1 Results: Profit falls 72% to Rs 1,278 crore on one-off settlement hit

Motilal Oswal on Bank of Baroda share price

Motilal Oswal Financial Services said Bank of Baroda reported a muted quarter, with the one-off provision weighing on earnings. It noted that the bank expects NIMs to remain broadly in the 2.75% to 2.95% range, while cost of funds appears to have largely bottomed out, with incremental support expected from improving yields.

Business momentum was soft this quarter, with management maintaining credit growth guidance of 12% to 14% going ahead.

While there are no inherent concerns on asset quality, the brokerage expects credit costs to stay high at around 60 basis points in FY28, factoring in the ECL-related transition. It reduced earnings estimates by 18.9% for FY27 and 5.2% for FY28 due to the one-time settlement impact.

Motilal Oswal maintained its ‘Neutral’ rating but cut its target price to Rs 275, implying nearly 12% upside.

Other brokerages

Systematix Institutional Equities said that excluding the one-off item, core performance remained healthy. However, it reduced earnings estimates to factor in margin pressure and other financial factors. It cut the target price to Rs 290 from Rs 300, while maintaining a ‘Buy’ call.

Dolat Capital maintained its ‘Reduce’ rating and lowered the target price to Rs 250, implying just over 1% upside. It expects RoA to decline to 0.9% in FY28 due to lower margins and upcoming ECL provisions. Its loan growth estimate of 12% over FY27 and FY28 is also below overall banking system expectations.

Also read | NMC health settlement drags Bank of Baroda Q1 net profit down 72%

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Shares in China’s biggest memory chip maker have surged by more than 470% as they made their debut on the Shanghai Stock Exchange’s tech-heavy STAR Market.

The surge has pushed CXMT’s stock market valuation to around 3.3 trillion yuan ($487.3bn; £364.9bn), making it the most valuable listed company in mainland China.

The spectacular debut comes despite a sharp selloff in technology stocks around the world this month.

CXMT manufactures dynamic random-access memory (Dram) chips that power artificial intelligence (AI) data centres, mobile phones, PCs, tablets and other devices.

The firm, which was founded in 2016 by Chairman Zhu Yiming, is headquartered in Hefei, Anhui Province in eastern China.

The company has said it plans to use most of the proceeds from the initial public offering (IPO) to boost production of memory chips and carry out more research and developments.

The strong performance of its IPO will offer some comfort to Chinese financial officials, who have been rolling out measures to help curb a stock market slump that wiped out more than $1.5tn in recent weeks.

South Korean tech giants Samsung Electronics and SK Hynix and US-based Micron dominate the Dram market, with the three companies accounting for around 90% of global production.

Earlier this month, SK Hynix raised $26.5bn (£19.8bn) in its New York share offering, marking the largest ever listing by a foreign firm in the US.

The company, a key supplier to AI chip giant Nvidia, said it had sold 177.9 million American depositary shares for $149 each.

The shares surged as much as 17% on Friday in their first day of trading on the Nasdaq but have since given up some of that gain.

SK Hynix saw its market value top $1tn in its home country in May, lifted by the boom in demand for AI chips.

This article was written by

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice. It may be structured as such, but it is not financial advice. Investors are required and expected to do their own due diligence and research prior to any investment.

Short-term trading, options trading/investment, and futures trading are potentially extremely risky investment styles. They generally are not appropriate for someone with limited capital, limited investment experience, or a lack of understanding for the necessary risk tolerance involved.

I own the European/Scandinavian tickers (not the ADRs) of all European/Scandinavian companies listed in my articles. I own the Canadian tickers of all Canadian stocks I write about.

Please note that investing in European/Non-US stocks comes with withholding tax risks specific to the company’s domicile as well as your personal situation. Investors should always consult a tax professional as to the overall impact of dividend withholding taxes and ways to mitigate these.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

This is the forum for daily political discussion on Seeking Alpha. A new version is published every market day.

Please don’t leave political comments on other articles or posts on the site.

The comments below are not regulated with the same rigor as the rest of the site, and this is an ‘enter at your own risk’ area as discussion can get very heated. If you can’t stand the heat… you know what they say…

More on Today’s Markets:

Moderation Guidelines:

We remove comments under the following categories:

• Personal attacks on another user account
• Anti-Vaxxer or covid related misinformation
• Stereotyping, prejudiced or racist language about individuals or the topic under discussion.
• Inciting violence messages, encouraging hate groups and political violence.

Regardless of which side of the political divide you find yourself, please be courteous and don’t direct abuse at other users.

For any issue with regards to comments please email us at : moderation@seekingalpha.com.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.