Bank of Baroda reported a modest rise in net profit for the fourth quarter of FY24, but a sharp drop in net interest income and rising slippages weighed heavily on investor sentiment. The bank posted a net profit of ₹5,047.7 crore, a 3.2 percent increase from ₹4,886.5 crore in the same quarter last year. While profit was aided by a rise in other income, core earnings disappointed the Street.
Net interest income (NII) for the quarter declined by 6.6 percent, missing analyst expectations. The fall in NII, coupled with an increase in slippages and loan loss provisions, raised credit risk concerns and triggered a sharp selloff in the stock. Bank of Baroda shares fell nearly 10 percent, hitting a lower circuit during the day’s trade.
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Asset quality saw marginal improvement. Gross non-performing assets (GNPA) as a percentage of total advances came down to 2.26 percent from 2.43 percent in the previous quarter. Net NPA stood at 0.58 percent, slightly lower than 0.59 percent in Q3 FY24. In absolute terms, gross NPA dropped to ₹27,835 crore from ₹28,471.2 crore, but net NPA rose to ₹6,994.2 crore from ₹6,825 crore, reflecting some stress build-up.
Despite the headline profit growth, concerns around core banking performance and rising write-offs cast a shadow on the bank’s earnings. Bank of Baroda’s current market price is ₹224, and the stock trades at a price-to-earnings ratio of 5.71 and a price-to-book value of 0.88, offering deep value compared to the industry averages. The return on equity for the year stands at 16.7 percent, while the return on assets is 1.19 percent. The bank declared a dividend yield of 3.37 percent for FY24.
While profit has grown at a compounded rate of 144 percent over the past three years, free cash flow remains negative at ₹-7,153 crore for the year and ₹-26,487 crore over the last three years. Operating profit margins are strong at 63.2 percent, but weak cash flow and a low Altman Z score of 0.48 highlight financial vulnerabilities.
The shareholding structure remains stable, with promoters holding 63.97 percent and foreign institutional investors reducing their stake to 8.98 percent from 12.40 percent a year ago. Domestic institutions increased their holding to 17.97 percent, while public shareholding rose to 8.83 percent.
Also Read: Jammu & Kashmir Bank Q4 FY24 Results: Profit Slips 8.5% YoY, Asset Quality Sees Notable Improvement
Analyst sentiment is still largely positive. Of the 32 analysts covering the stock, 66 percent recommend a buy, 13 percent rate it as outperform, and 16 percent suggest a hold. Only 6 percent have issued a sell rating, indicating that despite near-term headwinds, institutional confidence in the long-term outlook remains intact.
The Q4 numbers reveal a mixed picture for Bank of Baroda—strong net profit and operational margins on one side, but pressure on NII and rising asset concerns on the other. Investors may look for more clarity in the coming quarters as the bank navigates this transition phase.
Disclaimer
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Aditya Gaur is the founder of FinanceXaditya and a seasoned stock market investor with over 7 years of experience. Known for building India’s first public dividend growth portfolio showcase, he shares time-tested strategies and real insights that help everyday investors create wealth. With 50,000+ followers across social media, Aditya has become a trusted voice in personal finance and long-term investing.
