1. At a Glance
Bank of Baroda is that PSU uncle who got fit in his 50s. From bleeding balance sheets in the mid-2010s to now flaunting ₹19,618 Cr annual net profit and a juicy 3.43% dividend yield — this bank means business. The Q1 FY26 net profit of ₹3,517 Cr may be a dip QoQ, but it’s still the kind of dip you take with nachos.
2. Introduction with Hook
Remember the shy guy at the wedding who suddenly hits the gym, grows a beard, and now everybody’s auntie is asking if he’s single? That’s Bank of Baroda.
Once the poster child for PSU banking woes, BoB has done a Steve Rogers-to-Captain America transformation. In the last five years:
- Profit CAGR = 86% (yes, really)
- Deposits = ₹14.9 lakh crore
- Book Value = ₹297/share, CMP = ₹243
You’re literally buying this bank below book value. A PSU giving value investors a reason to get out of bed.
3. Business Model (WTF Do They Even Do?)
It’s a bank. But not just any bank.
- Retail Loans: Housing, personal loans, MSME, education — name a pain point, they’ll lend.
- Corporate Banking: From Adani to your local steel mill — BoB funds them all.
- Treasury Ops: Playing the bond market better than half of Twitter traders.
- Overseas Biz: Oman branch gone, other global tentacles still live.
- Digital Push: BoB World app — their attempt at being cool with Gen Z.
Basically, if SBI is the overworked babu, BoB is the PSU banker who finally got an MBA and a fintech makeover.
4. Financials Overview
| 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 |
Growth has been more stable than your neighbourhood LIC agent. And yes, EPS is now PSU royalty levels.
5. Valuation
- P/E: 6.47x
- P/BV: 0.82x
- Dividend Yield: 3.43%
- ROE: 15.5%
Method 1: P/BV Valuation
Fair P/BV for a bank with 16% ROE = 1.2x
FV = ₹297 x 1.2 = ₹356
Method 2: P/E-based
Fair P/E for consistent profit growth = 9x
FV = ₹40.06 EPS x 9 = ₹360.5
Fair Value Range: ₹355–₹365
Buy this bank below book value? That’s not investing — that’s daylight robbery in value investing’s favour.
6. What’s Cooking – News, Triggers, Drama
- ₹8,500 Cr Capital Raise approved in AGM
- Rs. 8.35 Dividend for FY25
- Amalgamation: Transferred Oman ops to Bank Dhofar. Pruning global fat.
- Depository Biz handed to BOB Capital Markets – focus is shifting.
- Q1 FY26 Net Profit dips 35% QoQ to ₹3,517 Cr — base effect + yield compression.
No drama, no frauds, no scandals — PSU behaving like HDFC? Shocking.
7. Balance Sheet
| Item | FY25 |
|---|---|
| Equity | ₹1,036 Cr |
| Reserves | ₹1,45,467 Cr |
| Deposits | ₹14,96,688 Cr |
| Borrowings | ₹1,35,813 Cr |
| Total Assets | ₹18,61,766 Cr |
Capital adequacy? Solid. Deposit growth? Solid. Loans? Still lending without overdosing on NPAs. This is a PSU bank playing like a private one on steroids.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net |
|---|---|---|---|---|
| FY23 | ₹-21,354 Cr | ₹-1,096 Cr | ₹-5,405 Cr | ₹-27,855 Cr |
| FY24 | ₹-6,274 Cr | ₹-1,285 Cr | ₹5,476 Cr | ₹-2,084 Cr |
| FY25 | ₹34,892 Cr | ₹-6,494 Cr | ₹3,790 Cr | ₹32,188 Cr |
Cash flow in FY25 is flexing like a bull in a PSU pasture. ₹34,892 Cr from operations is proof this bank’s engine is purring — not stalling.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 16% |
| ROCE | 6.29% |
| P/E | 6.47x |
| Dividend Yield | 3.43% |
| P/BV | 0.82x |
This is textbook “value stock” behavior. ROE is fire, P/E is dirt cheap, and the dividend can fund your Netflix subscription.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | Net Profit | EPS |
|---|---|---|---|
| FY23 | ₹94,503 Cr | ₹15,005 Cr | ₹28.82 |
| FY24 | ₹1,18,379 Cr | ₹18,869 Cr | ₹36.29 |
| FY25 | ₹1,27,945 Cr | ₹20,865 Cr | ₹40.06 |
From ₹28 to ₹40 EPS in two years? That’s not growth, that’s banking muscle memory. PSU turned compounding machine.
11. Peer Comparison
| Bank | EPS | P/E | ROE | Dividend Yield |
|---|---|---|---|---|
| SBI | ₹60+ | 9.6x | 17.2% | 1.97% |
| BoB | ₹40.06 | 6.47x | 16% | 3.43% |
| PNB | ₹30+ | 6.74x | 15.2% | 2.68% |
| Canara | ₹35+ | 5.4x | 17.7% | 3.61% |
BoB stands as the middle child — less hyped than SBI, more stable than PNB, and more handsome (read: consistent) than Canara. PSU banking’s underrated alpha.
12. Miscellaneous – Shareholding, Promoters
| Category | Jun 2025 |
|---|---|
| Promoters (GoI) | 63.97% |
| FIIs | 8.08% |
| DIIs | 18.79% |
| Public | 8.89% |
| No. of shareholders | 16.3 lakh |
FII holding slightly dipped from its 12.4% high. But DIIs seem happy, and public interest has been sticky. GoI retains iron grip (typical PSU vibes).
13. EduInvesting Verdict™
Bank of Baroda is giving classic “engineer turned entrepreneur” vibes — disciplined, focused, and suddenly profitable.
Clean NPA book, capital raise firepower, trading below book value, and rewarding shareholders generously.
A power PSU play hiding in plain sight. Not flashy — just freakishly solid.
Written by EduInvesting Team | 25 July 2025
Tags: Bank of Baroda, PSU Bank, Q1 FY26, Banking Sector, Edu Style Article, EduInvesting Premium
