Bank Of Baroda Receives 'Hold' Rating Upgrade from MarketsMOJO Based on Strong Fundamentals and Institutional Holdings

On November 26, 2024, MarketsMOJO upgraded its stock call on Bank Of Baroda to 'Hold'. This decision was based on several factors that indicate a positive outlook for the company.

One of the main reasons for the upgrade is the bank's strong provisioning practices, with a Provision Coverage Ratio of 71.26%. This indicates that the bank has a good strategy in place to handle potential loan defaults, which is a positive sign for investors.

Furthermore, Bank Of Baroda has shown strong long-term fundamental strength, with a 83.28% CAGR growth in net profits. This is a significant increase and showcases the bank's ability to generate consistent profits over time.

In addition, the bank's net profit has grown at an annual rate of 83.28%, which is a healthy long-term growth rate. This, combined with a ROA of 1.2, makes the stock an attractive investment option.

Moreover, the stock is currently trading at a fair value compared to its average historical valuations. Over the past year, while the stock has generated a return of 28.19%, its profits have risen by 13%. The PEG ratio of the company is also at a favorable 0.5.

Another positive aspect of Bank Of Baroda is its high institutional holdings at 26.47%. This indicates that these investors have better capability and resources to analyze the fundamentals of the company, making their investment decisions more reliable.

The company has also shown consistent returns over the last 3 years, outperforming the BSE 500 in each of the last 3 annual periods. With a market cap of Rs 1,27,836 crore, it is the second biggest company in the public banking sector, constituting 7.59% of the entire sector. Its annual sales of Rs 118,080.54 crore are also 10.05% of the industry.

However, the company's results for the quarter ended September 24 have been flat, with a decrease of 31.8% in PBT LESS OI(Q) at Rs 1,959.89 crore. The cash and cash equivalents (HY) have also decreased to the lowest at Rs 54,420.70 crore. Additionally, the non-operating income (Q) is 72.56% of the profit before tax (PBT).

From a technical standpoint, the stock is currently in a mildly bearish range. Multiple factors such as MACD, KST, DOW, and OBV are indicating a mildly bearish trend for the stock.

In conclusion, while Bank Of Baroda has shown strong fundamentals and consistent returns, the recent flat results and technical indicators suggest a cautious approach. Investors may consider holding onto their current positions in the stock for now.