Credit Suisse has maintained underperform call on the stock with a target price at Rs 115 per share, implying 5 percent potential downside from current level.
Bank of Baroda shares gained 3 percent intraday on June 28 despite global brokerage Credit Suisse maintaining its bearish call on the stock.
"We maintain underperform call on the stock with a target price at Rs 115 per share, implying 5 percent potential downside from current levels," the research firm said.
The brokerage further said growth for the merged entity has continued to weaken and it expects growth to remain tepid.
Vijaya Bank and Dena Bank amalgamated with Bank of Baroda w.e. f. April 1, 2019. "The Board of Directors on June 27 approved opening balance sheet of the amalgamated bank," the bank said.
Credit Suisse said post-merger balance sheet reveals Rs 6,000 crore hit taken to harmonise acting policies. "CET1 is now at 8.6 percent versus 10.4 percent reported by bank in Q4. It implies acquisition cost of 1.1x FY19 P/B for Dena & 0.8x for Vijaya Bank."
The brokerage further said coverage to IL&FS exposure remains low at 25 percent, but exposure to ADAG, DHFL & NBFCs will keep slippages & credit costs elevated. "We expect return on equity to remain in single digits even in FY21."
The stock rallied 7 percent in last one year. It was quoting at Rs 122.85, up 1.19 percent on the BSE, at 1448 hours.India Union Budget 2019: What does Finance Minister Nirmala Sitharaman have up her sleeve? Click here for top and latest Budget news, views and analyses.
