At a Glance
Bank of Baroda has gone from NPA-ridden dinosaur to a 15.5% ROE dividend-yielding machine. It’s now India’s third-largest public sector bank by market cap with ₹20,865 Cr net profit in FY25 and a P/E of just 5.9x. So… value buy or value trap?
1. 🧲 Introduction with Hook
Once upon a time, Bank of Baroda was just another PSU bank where profits went missing and NPAs went partying.
But today? It’s:
- Printing ₹5,400 Cr quarterly profits
- Paying 3.5% dividend yield
- Trading at 0.84x Book Value
Yet the stock still falls on good results. Why? Let’s dive in.
2. 🏦 WTF Do They Even Do?
Baroda Bhai handles it all:
- Retail & Corporate Banking
Home loans, MSME, working capital, corporate credit. - NRI & International
BoB has a large presence in the UAE, UK, and Mauritius. - Digital Push
BOB World app (which also saw controversy), and QR code war with fintechs. - Treasury & Rural
One of the most spread-out PSU banks with 9,300+ branches.
3. 💰 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹94,503 Cr | ₹1,18,379 Cr | ₹1,27,945 Cr |
| Net Profit | ₹15,005 Cr | ₹18,869 Cr | ₹20,865 Cr |
| ROE | 15% | 17% | 16% |
| EPS | ₹28.82 | ₹36.29 | ₹40.06 |
⚠️ Fun Fact: Profit is 14x higher than FY20 levels. PSU comeback story? Absolutely.
4. 💸 Valuation – Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| P/E | 5.94x |
| P/B | 0.84x |
| ROE | 15.5% |
| Dividend Yield | 3.52% |
| Fair Value Range (EduInvesting) | ₹280–₹310 |
🎯 FV Logic:
At 1x book (₹283) and 7.5–8x P/E on ₹40 EPS, fair value range = ₹280–₹310.
Current price ₹237 = undervalued on both fronts… unless market is pricing in PSU pessimism.
5. 🔥 What’s Cooking – News, Triggers, Drama
- 💥 Q4FY25: ₹5,447 Cr profit, EPS ₹10.48
- 📈 Global business at ₹26.4 Lakh Cr
- 🧾 Revised MCLR (overnight at 8.1%) for FY26 — positive for margins
- ⚠️ ₹8.5 Lakh Cr contingent liabilities – mainly guarantees + derivatives
Also…
- RBI pulled them up for BOB World data issues last year
- Fintech partnerships cautious, but UPI traction is strong
6. 🏦 Balance Sheet – How Much Debt, How Many Dreams?
| Item | FY25 |
|---|---|
| Total Deposits | ₹14.96 L Cr |
| Borrowings | ₹1.36 L Cr |
| Total Liabilities | ₹18.6 L Cr |
| Total Assets | ₹18.6 L Cr |
| Equity Capital | ₹1,036 Cr |
| Reserves | ₹1.45 L Cr |
💰 CASA Ratio ~40%
🧾 Gross Advances: ₹10.5 L Cr
🛡️ CAR: ~15.3% (healthy)
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY25 | ₹34,892 Cr | ₹(6,494) Cr | ₹3,790 Cr | ₹32,188 Cr |
Strong operating cash, minimal investing cash burn, and no crazy capital raising = clean cycle.
8. 📉 Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 15.5% |
| ROA | 1.18% |
| NIM | ~3.3% |
| Net NPA | ~0.8% (est.) |
| Cost-to-Income | ~47% |
| GNPA | ~2.92% (expected FY26 Q1) |
✅ Massive improvement from GNPA of 10%+ in FY18
🔋 Credit cost falling, recovery improving
9. 🧾 P&L Breakdown – Show Me the Money
- FY25 Net Profit: ₹20,865 Cr
- EPS: ₹40.06
- Dividend Payout: ~21%
- Interest Income: ₹78,265 Cr
- Other Income: ₹24,939 Cr
Q1FY26 expected to maintain ₹5,000 Cr+ profit unless NIM shock or treasury losses hit.
10. 🏦 Peer Comparison – Who Else in the Game?
| Bank | P/E | ROE | P/B | Yield |
|---|---|---|---|---|
| SBI | 9.3x | 17.2% | 1.48x | 1.97% |
| PNB | 6.9x | 15.2% | 0.95x | 2.63% |
| Canara | 5.8x | 17.8% | 0.96x | 3.6% |
| Union Bank | 6.1x | 17% | 0.96x | 3.3% |
| BoB | 5.9x | 15.5% | 0.84x | 3.52% |
🧮 BoB is among the cheapest of the Big 5 PSUs. Higher dividend, similar ROE = value buyer’s pick.
11. 🧿 Miscellaneous – Shareholding, Promoters
| Stakeholder | Jun 2025 |
|---|---|
| Govt (Promoter) | 63.97% |
| FIIs | 8.98% |
| DIIs | 17.97% |
| Public | 8.83% |
| Shareholders | 16.9 Lakh+ |
📉 FII stake fell from 12.4% to 8.9% over last 4 quarters
📈 Retail + DII have picked it up instead. PSU banks now in everyone’s long-only portfolios.
12. 🧠 EduInvesting Verdict™
🚩 Let’s not sugarcoat it: BoB is cheap for a reason — PSU baggage, volatility, regulatory risk.
But…
✅ 16% ROE
✅ ₹40 EPS
✅ 3.5% yield
✅ 0.84x Book
If BoB were a private bank, you’d be paying 2.5x P/B and calling it HDFC Lite.
So until the next PSU scandal or rate cycle dip, this one looks like a cash cow wrapped in undervaluation.
🎯 Fair Value Range: ₹280–₹310
✍️ Written by Prashant | 📅 11 July 2025
Tags: Bank of Baroda, PSU Banks, Dividend Yield, BoB World, Public Sector Stocks, NPA Reduction, EduInvesting, Banking Sector, SBI Peers, Value Stocks India
