According to Morgan Stanley analysts, the stock is expected to remain weak in the short-term as they do not anticipate any change in asset-quality estimates for FY25.
Bank of India share price fell by more than 11%, down to Rs 123 each, after contracting the margins by 23 basis points YoY in Q4 FY 24.
Nevertheless, despite the decline, Morgan Stanley’s analysts maintained an “overweight” rating on the stock and set a target price of Rs 124 per share. As a result, this brokerage company expects that asset quality will be preserved during FY 25 while Q4 FY 24 results have shown increased slippages and credit costs among some other concerns.
Bank of India reported Q4 FY 24 net profit growth of 7% YoY at Rs1,439 cr and net interest income was up by 7% YoY to Rs 5,937 cr. Although global business at the bank rose by 11.6% YoY to Rs 11.8 lakh crore it managed to keep its worldwide ROA almost constant at 0.6%YoY.
The board has proposed a dividend of INR2.8/sh with FV INR10 for FY23-24 subject to shareholders’ approval.
The bank displayed robustness in its asset quality during Q4FY2012-13.The gross NPAs ratio recorded was noted as of 4.98% which is a significant improvement from previous year (7.3%). The Net NPAs also showed some signs of improvement since they went down from previous year’s 1.66 percent to stand at about 1.22 percent, YoY.
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Year-to-date Bank of India shares are up +8%, outperforming the benchmark Nifty 50 index that has risen by +2%. Prior to this date shares had touched their peak (New-High) for the last one year at INR158 on April 30th,2024.
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