Bank of India shares slump 8% despite robust Q3 earnings

Bank of India share price declined as much as 8.55 percent on Monday's trading session, fell to ₹138.60 per share. This happened after the bank posted robust third quarter earnings last week, which led investors rushing to secure profits, following a substantial 34 percent rally since October.

According to analysts attribute the significant decline in Bank of India to a dual influence of profit booking following the release of financial results and the persistent margin compression affecting the banking sector.

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On February 2, Bank of India disclosed a notable 62.4 percent year-on-year surge in net profit, amounting to ₹1,895 crore in the third quarter. This positive financial performance was attributed to an enhancement in Net Interest Income (NII).

The bank's gross non-performing assets (NPA) registered at 5.35 percent, reflecting a decline from 7.66 percent in the corresponding period of the previous year. In parallel, the net non-performing assets (NPA) demonstrated an improvement, standing at 1.41 percent compared to 1.61 percent in the same period last year.

“Continued healthy business growth, steady margins and moderation in credit costs is seen as an aid to improve the ROA. Recovery from stressed and written off exposure could act as an earnings catalyst going forward," said ICICI Direct, while giving ‘buy’ call to the stock with a target price of ₹165.

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Among the four analysts covering BOI, two advocate a 'buy' rating, one advises a 'hold,' and another proposes a 'sell,' as per Bloomberg data. The consensus of 12-month analyst price targets indicates a potential decline of 3.4 percent.

Over the past 12 months, the stock has witnessed an impressive surge of 78.70%. The current day's traded volume is notably robust, standing at 4.2 times its 30-day average. Additionally, the relative strength index (RSI) is currently positioned at 62.