Bank of India Reports 82.5% Profit Surge in March Quarter; Brokerage Firm Recommends Buy with ₹130 Target Price and Dividend Announcement.
PSU Bank Stock: Public sector lender Bank of India (Bank of India) has demonstrated exceptional performance in the fourth quarter (Q4 FY25). The bank's net profit soared by 82.5% year-on-year, reaching ₹2,626 crore. Following this impressive growth, brokerage firm Mirae Asset (Sharekhan) has issued a BUY recommendation for the stock, setting a target price of ₹130.
Current Market Trends and Focus on PSU Stocks
On May 13, 2025, domestic stock markets experienced a slight dip. However, this followed the market's best rally in four years the previous day. Currently, experts anticipate a market consolidation phase. Amidst this environment, investor interest in PSU bank stocks has increased.
Why are Bank of India's Q4 Results so Strong?
- Bank of India recorded a remarkable 82.5% growth in the March quarter.
- The bank's profit increased from ₹1,438.91 crore in the previous quarter to ₹2,625.91 crore.
- Growth in Non-Interest Income significantly boosted profits.
- The bank's total profit for the entire fiscal year 2024-25 amounted to ₹9,219 crore, a 45.92% year-on-year increase.
Brokerage Opinion: BUY Rating and ₹130-₹145 Target
Brokerage firm Mirae Asset Sharekhan maintains a BUY rating on Bank of India. The brokerage believes the stock has the potential for an additional 18% return. The target price is set between ₹130 and ₹145.
Expert Opinion:
- The bank's stock is trading at a valuation of 0.6x/0.5x on estimated ABV for FY2026E/FY2027E.
- No new concerns regarding Asset Quality.
- The bank has the potential for improved RoA (Return on Assets) due to b recovery and treasury gains.
Pressure on Core Profitability, but Risk is Priced In
The brokerage believes that core operating profitability may remain slightly weak, but this risk is already factored into the stock's valuation. The bank is focused on increasing returns from other sources, such as fee income and distribution income.
Dividend Announcement: A Bonus for Investors
Bank of India's board has recommended a dividend of ₹4.05 per share for FY25. This will provide an additional benefit to investors.
Review of Bank of India's Stock Performance
- The stock is currently trading 20% below its 52-week high.
- The 52-week high is ₹137.35, and the 52-week low is ₹90.
- It has shown a 6% increase in one month and a 13.31% increase in three months.
- However, the stock has declined by 8% in one year.
Over two years, the stock has delivered a 47.53% return, and over five years, a remarkable 234.31% return.
