01 — At a Glance
The Government Bank That’s Quietly Destroying Competition
- 52-Week High / Low₹326 / ₹201
- FY26 Revenue (TTM)₹1,32,604 Cr
- FY25 PAT (Annual)₹20,865 Cr
- Q3 FY26 EPS₹10.53
- Annualised EPS (Avg Q1-Q3)₹41.36
- Book Value₹318
- Price to Book0.93x
- Dividend Yield2.83%
- Debt / Equity10.4x
- Return on Equity15.5%
Auditor’s Opening Note: Bank of Baroda closed Q3 FY26 with ₹33,600 crore revenue, ₹5,055 crore profit (+4.5% YoY), 15.3% ROE, and P/E of 7.85x — trading below book value at 0.93x. The bank’s advances grew 14.7% YoY (best in ~8 quarters), GNPA improved to 2.04%, and management claims “absolutely no one-offs.” Meanwhile, peers are debating whether PSBs are dead. Bank of Baroda is too busy counting money and compounding capital to care about the debate.
02 — Introduction
Welcome to India’s Least Sexy, Most Profitable Bank
Bank of Baroda isn’t trying to win design awards or launch fintech unicorns. It’s a 128-year-old government-owned bank with 64% promoter stake, 8,400 domestic branches, 188 million customers, and a mandate to do boring, profitable banking at scale. It lends to farmers, tractors, and mid-market businesses. It takes deposits from grandmothers in rural Gujarat and professionals in Bangalore. It earns 15.3% ROE while you’re busy arguing whether fintech platforms should have bank licenses.
After three merger-induced years of chaos (Dena Bank + Vijaya Bank amalgamation completed in 2019), the bank is now in a “normalized” phase. The term management uses constantly to mean: no surprise restructuring charges, no one-off regulatory provisions, no “strategic” credit losses — just plain vanilla banking profit compounding at 86.2% CAGR over five years.
Q3 FY26 delivered exactly this narrative: highest advances growth in eight quarters, best quarterly savings deposit growth in eight quarters, ROA at 1.09%, dividend payout at 21% of FY25 earnings. The 64% government stake means there’s zero default risk on the deposit side — which is why institutional investors are quietly loading up despite the “PSB is dead” Twitter narrative.
Let’s break down why a bank that nobody wants to talk about might be exactly the compounding machine you should own, or at least understand. Spoiler: the margins are thinner than a Jain restaurant menu, but the predictability is thicker than the Bhima River.
Concall Clarity (Feb 2026): “We don’t have any one-offs… a normalized quarter for us.” — Management’s opening line. In banking, boring = healthy. BoB is healthier than it’s been since the mergers.
03 — Business Model: What Do Boring Banks Even Do?
Take Deposits. Lend Money. Pray for Low NPAs. Repeat.
Bank of Baroda’s business model is textbook banking: accept deposits (₹14,96,688 crore in FY25), lend to corporates (41% of advances), retail borrowers (29%), agriculture (15%), and MSMEs (15%), and capture the spread between the cost of deposits and yield on advances. That spread is called Net Interest Margin (NIM). In Q3, it was 2.79% — which sounds pathetic until you realize managing billions in deposits while maintaining 2.8% margin requires the precision of a Swiss watch and the risk tolerance of a bureaucrat.
The bank operates across three revenue geographies: India (domestic), international branches (17 countries, 91 offices), and subsidiaries with JVs in Malaysia and Zambia. International business is 18% of gross advances and 16% of deposits — a diversification hedge against Indian policy surprises.
Strength: ₹1,49,669 crore in deposits as of Sep 2025, making BoB the third-largest PSB by deposits. 6.5% market share. 38.4% CASA ratio (Current Account Saving Account — low-cost money). Weakness: 63.97% of deposits are term deposits — sticky deposits that need repricing upward when RBI hikes rates, which erodes NIM. That’s the banking equivalent of being locked into a 30-year fixed mortgage when inflation is rising.
Retail Advances29%Mix of Advances
Corporate41%Mix of Advances
Agri + MSME30%Mix of Advances
Market Share6.5%By Deposits
Rating Upgrades Are Screaming: S&P (Feb 27, 2026) assigned BBB (Stable), ICRA assigned AAA (Stable) to ₹10,000 crore green bonds, Fitch affirmed BBB- (Stable). India Ratings locked in IND AAA (Stable). Translation: the bank’s credit quality is fortress-like, backed by 63.97% government ownership and improving asset metrics.
💬 Do you trust PSBs with your money despite the “bad bank” narrative? Or do you think private banks have a better business model? Drop your view!
04 — Financials Overview
Q3 FY26: The Numbers That Prove Boring Works
Result type: Quarterly Results | Q3 EPS: ₹10.53 | 9M Avg EPS (Q1-Q3): ₹10.34 | Annualised EPS: ₹41.36
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 33,600 | 32,570 | 33,318 | +3.16% | +0.85% |
| Operating Profit | 7,377 | 7,185 | 6,695 | +2.67% | +10.20% |
| Cost-to-Income % | 38% | 37% | 39% | +100 bps | -100 bps |
| Net Profit | 5,055 | 4,840 | 5,181 | +4.40% | -2.43% |
| EPS (₹) | 10.53 | 10.08 | 9.93 | +4.46% | +6.05% |
The Math Check: 9M average EPS = (8.61 + 10.36 + 10.53) / 3 = ₹9.83. Annualised EPS (9M avg × 4) = ₹39.32. Conservative estimate given Q4 seasonality is positive. FY25 full-year EPS was ₹40.06, so annualised 9M trajectory suggests FY26 could print ₹40-42 EPS. Current P/E of 7.85x is calculated on TTM (trailing twelve months) basis — extremely cheap for a bank with 15.5% ROE and zero credit risk.
05 — Valuation: Fair Value Range
What’s a Government-Backed Bank With 15% ROE Actually Worth?
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