Bank of Baroda (BOB) is the 3rd largest PSU bank in India. BOB has a vast network of 8000+ branches, and approximately 12,000 ATMs showing a widespread outreach network in the country.
Let’s discuss how Bank of Baroda’s share target price would be in 2024 and 2025.
Bank of Baroda Share Price Target 2025
Bank of Baroda’s stock is trading in the range of Rs 180 to Rs 190 these days. The banking stock has already given a 40% CAGR in the last 1 year which is impressive.
According to the experts at Yes Securities, the consensus price target for Bank of Baroda shares by 2025 is somewhere around Rs. 234 in the next year. Analysts are expecting a further rise in BOB stock price to reach 300 to Rs. 310 by 2025.
Experts are predicting a boom in the Indian economy in upcoming years that will eventually grow the banking sector for sure.
Fundamental Analysis of Bank of Baroda
#1. Loan Portfolio Diversity
When it comes to loans, the Bank of Baroda knows how to diversify. Corporate loans make up 40% of their total, followed by retail loans (22%), and so on.
|Loan Book (%ge)
Within the retail segment, home loans account for a whopping 56%, auto loans 18%, education loans 5%, and others make up the rest of the pie.
75% of their corporate advances hold A and better ratings from rating agencies. Moreover, 38% of the corporate book is comprised of Public Sector Undertakings (PSUs) and government departments.
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#2. Revenue Growth
Bank of Baroda has faced continuous growth over the past five years with slight ups and downs in revenue generation during the 2020-22 time period.
BOB has managed to maintain an average annual revenue growth rate of 15%. A decent average annual growth is a strong indicator of positive trends and revenue generation capability.
#3. Profit Growth
Bank of Baroda’s profitability has seen significant improvement, with a jaw-dropping net profit growth of 153% in the last 3 years and a consistent profit growth of 58% from 2019 to 2023.
The above stats show the effective top management that is making a profitable business year on year.
#4. NPA, ROE & ROA
The gross NPA ratio has dropped from 1.72% in 2022 to a reassuring 0.89% in 2023. Bank of Baroda is making serious efforts to improve its non-performing asset quality.
Bank of Baroda stock has given a consistent ROE of 8.47% for the last 3 years which is good and ROA also increasing constantly but the stock has given 0.57% returns which is low but shows consistent growth and profitability.
#5. Peers Comparison
Bank of Baroda has surpassed major competitor banks like IDFC First Bank in terms of stock performance in the last 1-year and its fundamentals also seem robust (already discussed in the previous sections).
Bank of Baroda has given almost 40% return, whereas leading banks like SBI and ICICI Bank both have given merely 4% and 9% return in one year respectively.
But if you check out other factors like profitability, then Bank of Baroda is lagging behind its peers in overall profit gains from the business. You can see that Bank of Baroda has a low-profit margin as compared to the peers mentioned below.
Bank of Baroda also has a lower ROE and EPS as compared to HDFC, ICICI, and SBI banks.
Bank of Baroda’s Technical Analysis
Bank of Baroda (BOB) seems to be flashing some interesting signals on the charts. When we look at the oscillators, we can see a clear indication of neutrality, with 9 neutral signals.
However, there is one sell signal, one neutral, and thirteen buy signals in Moving Averages, suggesting a strong positive Buying sentiment among investors.
#1. Moving Averages
BOB is showing a strong 13 buy signals, indicating that the stock’s price is trending upwards. On the flip side, there’s just one sell signal and one neutral signal, reinforcing the positive outlook.
BOB’s price has consistently remained above the 50-day moving average as well as the 200-day moving average, indicating a bullish trend.
#2. Relative Strength Index (RSI)
The Relative Strength Index (RSI) is like a heart rate monitor for stocks. Bank of Baroda’s stock has been keeping a healthy rate, consistently maintaining an RSI above 66.
While oscillators suggest a mixed sentiment, the moving averages point towards a more bullish trend. You should consider these signals in conjunction with expert analysis when making your investment decisions.
Factors That May Affect Bank of Baroda’s Growth
I. Loan Portfolio Growth
Bank of Baroda’s robust loan portfolio growth is like a turbocharger for the engine. BOB’s loan book mainly consists of retail and corporate lending, it can contribute to increased interest income and overall profitability.
II. Digitalization Efforts
Bank of Baroda is embracing digital transformation and innovative banking solutions. The PSU bank’s focus on enhancing customer experience, and operational efficiency, will attract new customers in the future.
III. Economic Conditions Matter
The whole banking sector (including BOB) highly depends on macroeconomic factors like GDP growth, inflation rates, and interest rate movements.
Favorable economic conditions can stimulate borrowing and lending activities, positively impacting Bank of Baroda’s financial performance.
Experts say, that since the Indian economy is booming now, this may give a positive BOB business price growth in the long run.
According to the current wisdom of the stock market experts, the consensus price target for Bank of Baroda shares by 2025 hovers around Rs. 310. But remember, the stock market is like a wild river; it can be unpredictable.
Stay informed about Bank of Baroda’s performance, monitor market trends, and be proactive in analyzing relevant factors.
You can also read about other stocks’ target prices –
Bank of Baroda is a significant player in the Indian banking sector. While its exact market share may fluctuate, it holds a prominent position among Indian banks. It’s known for its extensive network and diverse customer base.
Bank of Baroda’s financial performance has been on an upward trajectory. It has shown steady growth in revenue, improved profitability, and effective management of non-performing assets (NPAs). These factors bode well for the bank’s future prospects.
Bank of Baroda’s growth drivers include its expanding loan portfolio, digitalization initiatives, and diversification into ancillary financial services such as insurance and wealth management. These strategies can provide additional revenue streams and fuel growth in the future.
Like any investment, there are risks associated with investing in the Bank of Baroda. The key risks are – interest rates, regulatory challenges, asset quality deterioration, and macroeconomic uncertainties.