Bank of Baroda Share Price Plunges 15% Despite Q4 Profit Surprise
Bank of Baroda (BoB) shares took a dramatic dive on Tuesday, May 6th, 2025, plummeting 15% despite reporting better-than-expected quarterly profits. This unexpected drop leaves investors questioning the bank's future performance. Let's delve into the details of BoB's Q4 FY25 results and the market's reaction.
A Tale of Two Halves: Profits Up, Interest Income Down
BoB announced a net profit of ₹5,047.73 crore for Q4 FY25, a 3.3% increase compared to the previous year's ₹4,886.49 crore. This exceeded analyst predictions of around ₹4,801.7 crore. However, this positive news was overshadowed by a significant decline in net interest income (NII), the bank's core revenue from lending.
- NII fell by 6.6% to ₹11,019.6 crore compared to ₹11,793 crore in Q4 FY24.
- This drop, coupled with increased provisions, triggered a significant sell-off.
The market reacted swiftly. BoB's share price plummeted by 14.9%, reaching a low of ₹212.10 on the BSE, with trading volumes more than tripling the recent average. The closing price settled at ₹223.65, representing a 10.27% decrease.
Dividend Announcement and Full-Year Performance
Despite the Q4 setback, BoB declared a final dividend of ₹8.35 per share for FY2024-25, with the record date set for June 6, 2025. Looking at the full-year performance offers a more positive perspective:
- FY25 net profit increased by 10.1% YoY to ₹19,581 crore.
- Annual net interest income grew by 2.1% YoY to ₹45,659 crore.
- Operating profit rose by 4.7% YoY, reaching ₹32,435 crore.
Strong Loan Growth, but Rising Concerns
BoB experienced robust growth in its loan book, particularly in retail segments:
- Auto loans: up 20.3% YoY
- Mortgage loans: up 18.9%
- Home loans: up 17.3%
- Education loans: up 15.9%
- Agriculture loans: up 14.2%
- MSME loans: up 14.2%
- Corporate advances: up 8.6%
Domestic advances increased by 13.7% YoY to ₹10.21 lakh crore, while global advances rose by 12.8% to ₹12.30 lakh crore. Global deposits also saw a 10.3% increase, reaching ₹14.72 lakh crore. While asset quality showed improvement (Gross NPA ratio down to 2.26%, Net NPA down to 0.58%), gross slippages increased sequentially, raising concerns.
Analyst Perspectives on Bank of Baroda Share Price
Analyst opinions are divided. Some highlight the bank's robust performance, improving asset quality, and healthy net interest margin (NIM) of 3.02%, viewing BoB as a compelling long-term investment. Others express caution, citing the drop in NII and potential for further correction in share price.
Conclusion: A Wait-and-See Approach
Bank of Baroda's Q4 results present a mixed picture. While the bank achieved higher-than-expected profits and strong loan growth, the decline in NII and increased provisions triggered a significant share price drop. The long-term outlook might remain positive for BoB, but investors should proceed with caution and monitor the bank's performance closely to assess future stability and consistent margin performance.
