Bank of Baroda Q2 results preview: Single-digit growth in net profit expected, margins to remain in focus

In a stock exchange notification earlier this month, Bank of Baroda informed that a meeting of its Board of Directors will be held on Friday, October 25, to consider and approve the unaudited financial results of the company for the September quarter.

Experts are projecting the public sector lender to report a growth in net profit in the range of 1%-8% for Q2 FY25, compared to a year ago period. On a quarter-on-quarter basis, net profit growth may remain flat with a negative bias.

The profit number is being pegged at anywhere between ₹4,301 crore and ₹4,600 crore for the second quarter of the current fiscal.

Meanwhile, net interest income (NII) is also expected to grow in the range of 6%-11% during Q2 FY25 compared with the year-ago levels. NII might be in the range of ₹11,486 crore to ₹12,040 crore during the September quarter.

Q2 business update

As a part of its quarterly update, Bank of Baroda had announced earlier this month that its global advances grew 11.6% to ₹11.43 lakh crore in Q2 FY25 compared with the year-ago levels, while global deposits increased 9% to ₹13.63 lakh crore.

Overall, the bank’s global business grew 10.2% to ₹25.06 lakh crore during the September quarter compared with a year ago.

Previous quarter performance

In the previous quarter ended June 2024 (Q1 FY25), Bank of Baroda had reported a 9.5% increase in its standalone net profit to ₹4,458 crore. However, it was down 9% on a sequential basis.

Net Interest Income (NII) had risen by 5.5% to ₹11,600 crore in Q1 FY25, while global net interest margins (NIM) stood at 3.18% during the quarter.

Key factors to look out for

Investors are likely to watch out for management commentary around the bank’s outlook for margins, credit costs and business growth.

Any discussion on the bank’s asset quality trends, that has shown an improvement over the previous quarters, would also be in focus.

Bank of Baroda share price

In a positive sign, Bank of Baroda shares gained as much as 3.25% to hit the day’s high of ₹245.7 apiece on the NSE on Thursday, just a day before the earnings announcement. However, the PSU bank stock pared some of early gains to close at ₹244.6 apiece, up 2.79%, on the NSE.

The stock has gained nearly 2% in the past five trading sessions. Bank of Baroda share price has remained nearly flat in the past one month. However, the stock has rallied 5.3% so far year-to-date and 25% in the last one year.