Bank of Baroda an outperformer with price target of Rs 650 -Karvy Stock Broking

Karvy Stock Broking in its January 29, 2010 research report has recommended an outperformer rating on the stock Bank of Baroda with a price target of Rs 650.

It further went on to say that given the backdrop of a rise in bond yields and sluggish credit growth in the industry, Bank of Baroda, (BOB) reported strong 3QFY2010 profits supported by lower provision for taxes and a healthy rise in the net interest income. While net profits was 30% higher than our estimates, operating profit was only 10% higher than our estimates. We are revising our FY2010 profits upwards by 4% to Rs29.6bn and increasing FY2011 profits by 2% to Rs35.8bn. As the Dubai exposure concerns have also considerably lessened for BOB we are re-rating the price from Rs 450 to Rs 650 (1.4x FY2011 BV) and change our recommendation from Sell to Out Performer.