Shares of state-owned Bank of Baroda (BoB) climbed over 5% on Monday after the lender reported strong financial results for the second quarter of fiscal year 2027. The positive performance prompted JM Financial to upgrade its rating on the stock to 'buy'.
The Bank of Baroda shares gained 5.11% to reach Rs 250.70, up from its previous close of Rs 238.50. A total of 5.56 lakh shares were traded, amounting to a turnover of Rs 13.75 crore. This surge pushed the bank's market capitalization to Rs 1.26 lakh crore.
Strong Q2 FY27 Performance
Bank of Baroda delivered a robust Q2 FY27, with net profit soaring 35.8% year-on-year to a record Rs 6,532 crore. Key financial indicators also showed significant improvement:
- Net Interest Income (NII): Increased by 9% to Rs 13,026 crore.
- Non-Interest Income: Surged by 95.8% to Rs 6,881 crore.
- Operating Profit: Grew by 50.9% to Rs 11,430 crore.
Asset quality also saw substantial improvement, with the gross Non-Performing Asset (NPA) ratio declining to 1.78% from 2.16% a year ago. The net NPA ratio fell to 0.37% from 0.57%. The bank's return on equity (ROE) improved by 363 basis points to 19.28%, and its slippage ratio decreased to 0.69%, reflecting better asset quality and fewer fresh loan defaults.
Brokerages React with Upgrades and Positive Outlooks
Following the impressive results, several brokerages revised their views on Bank of Baroda shares.
JM Financial Upgrades to 'Buy'
JM Financial upgraded Bank of Baroda's stock to 'buy' with a revised target price of Rs 280 (previously Rs 270). The brokerage noted that the stock had corrected 20% since its downgrade in January 2026, making valuations attractive. JM Financial highlighted:
"Now, with improving growth visibility, benign asset quality, limited insurance-related earnings risk and potential margin recovery, we believe the risk-reward has turned favourable, warranting an upgrade in our stance."
The firm also increased its FY27 EPS estimates by 16%.
Axis Securities Maintains 'Buy' Call
Axis Securities maintained its 'buy' rating on the banking stock, setting a price target of Rs 290. The brokerage noted that BoB's performance in terms of Net Interest Income (NII), Pre-Provision Operating Profit (PPOP), and Profit After Tax (PAT) surpassed its estimates. Axis Securities stated that management remains confident in sustaining growth momentum, revising credit growth guidance upwards to 13-15% from 12-14% earlier. The management also expects NIMs to remain between 2.75-2.95%, aiming for the upper end of the guidance.