Bank of Baroda found it good going on the bourses today as the market reckoned that the plans to return Rs 50-90 crore to the Centre would suit the company.

The scrip of the fourth-largest Indian bank in terms of assets scaled a new high of Rs 139.70 early today but dipped slightly thereafter to Rs 138.10, still higher by 5.18% over its yesterday's close.

At 13:25 IST, volumes of over 22 lakh shares had been recorded in Bank of Baroda (BoB) on BSE.

The scrip has done exceedingly well of late, in the general uptrend in banking stocks, rising 71.55% from Rs 80.50 on 29 April 2003.

Today, Bank of Baroda (BOB) is scheduled to unveil its quarterly as well as full year results ended 31 March 2003.

For Q4, a capitalmarket.com poll of five banking analysts has arrived at an estimate of a net total income in the range of Rs 818.5 to Rs 859 crore for MQ 2003 as against Rs 770.23 crore in MQ 2002, a growth in the range of 6.3% to 11.5%. Net profit is expected at between Rs 123 crore to Rs 162.5 crore compared to Rs 106.74 crore in MQ 2002, a growth of 15.5% to 52%.

The scrip is being bolstered currently on market talk that the public sector bank plans to return equity amounting to around Rs 50-90 crore out of the total equity of Rs 296 crore held by the government in the bank.

Currently, the Union Government holds 66.2% stake in Bank of Baroda (BOB). If the bank reduces capital by Rs 90 crore, its EPS (on the basis of its nine-month results) will rise from Rs 25.9 to Rs 37.

BoB has been placing a strong emphasis on the retail loans segment of late, and this has driven growth in the previous financial year. For the nine-month period ended 31 December 2002, BoB's interest income rose 4% to Rs 4,583.56 crore.

During the period under review, net profit after making adjustment for income-tax refund rose 45% to Rs 569.64 crore. During the nine-month period ended 31 December 2002, the bank's global advances rose 16% to Rs 34,449 crore on a y-o-y basis.

Similarly, global deposits rose 12% to Rs 66,820 crore . When compared to March 2002, the same grew by 8%.

Bank of Baroda's provisioning cover has grown impressively from 54% in FY 1999 to 70% in the nine months to FY 2003 and its net non-performing loans (NPLs) have fallen from 7.6% to 4% during the same period.

Bank of Baroda is the fourth-largest bank in terms of asset size. The bank's branch network is concentrated in the western region with a significant presence in the northern region as well. Its presence in the south and east is limited. The western region accounts for 65% of its total business.

Banking analysts say, fundamentally, the stock is good and it is undervalued as it currently trades below its projected FY 2003-04 adjusted book value of Rs 140 per share.

As on 31 March 2003, public and institutions held 11.61% and 17.61% stake in BoB, respectively.