Bank of Baroda (BANKBARODA)

FairStock Score: 66/100 — STEADY

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 1/2 · Dividend: 1/1

Key Financials

Strengths

• Trading below book value: P/B 0.97, price ₹276.05 versus book value ₹283.30
• Graham Number at ₹489.88 implies a margin of safety of 34.28%
• Piotroski F-Score 8/9 and positive free cash flow of ₹28,398 Cr indicate strong financial health for a PSU bank
• ROE of 13.29% with a 2.59% dividend yield offers a reasonable income and return profile
• Promoter holding of 63.97% provides ownership stability

Concerns

• Profit growth is negative at -4.72% even though sales grew 28.97%, raising questions about earnings quality and costs
• Public sector bank with high leverage: D/E of 11.14 means asset quality and capital buffers must be watched closely
• Altman Z-Score of 0.35 is weak, though bank financials need more tailored analysis
• The wide gap between DCF value and market price could suggest market worries about future credit stress or dilution

AI Analysis

Let me look at Bank of Baroda the way Graham would: as a business. I am offered a share for ₹276, while the book value stands at ₹283.30. That means I am buying a rupee of tangible equity at 97 paise, with a P/B below 1 and a P/E of 8.55. The Graham Number of ₹489.88 suggests a 34% margin of safety, and even my computed DCF says ₹691.99. But I must be careful: banking is a leveraged business, so debt/equity of 11.14 is normal, not a red flag. Altman Z and EV/EBITDA are not tools for banks. The moat comes from a 63.97% government promoter holding, a banking license, and a low-cost deposit franchise. Return on equity at 13.29% is respectable, and Piotroski F-Score 8/9 tells me the balance sheet is improving. Sales grew 28.97%, but profit fell 4.72%; the latest quarter still earned ₹5,501 Cr on revenue of ₹33,600 Cr. Free cash flow of ₹28,398 Cr gives cushion. Dividend yield 2.59% lets me wait patiently. I won't be enamored by glamour; this is a steady, slightly dull asset play on a solid public sector bank. The test is credit quality and whether the profit decline is transient. If the bank can keep ROE in low teens and avoid bad loans, the discount to book should close. If not, book value can erode. At 8.55 times earnings, I am paid to wait. Patience, and discipline.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer