BANKBARODA Q2 FY27 Earnings Call: Record Profit on NSE Gains, Raises Credit Growth Guidance to 13-15%

BANKBARODA held its Q2 FY27 earnings call on October 30, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Profitability, Flattered by NSE Gains

• Operating profit of Rs.11,433 crore, up 50.9% YoY — the highest ever quarterly operating profit; net profit of Rs.6,532 crore (+38.8% YoY) was also a record for the bank.
• NSE stake sale contributed materially — Rs.1,349 crore cash profit plus a valuation gain; CEO sized the combined impact at ~Rs.3,200 crore, of which Rs.1,600 crore went to prudential provisioning, so the post-tax benefit retained is significantly lower.
• Operating profit excluding the entire NSE impact at Rs.7,749 crore — an analyst independently estimated ~Rs.3,680 crore of Q2 FY 2026-2027 profit from NSE listing-related revaluation/profit booking.
• ROA at 1.26% (+19 bps YoY) and ROE at 19.28% (+363 bps YoY) in Q2 FY 2026-2027; H1 FY 2026-2027 operating profit was Rs.19,557 crore (+23.7% YoY) with net profit of Rs.7,810 crore.
• NII grew 9% YoY in Q2 FY 2026-2027 (9.2% for H1 FY 2026-2027); NIM at 2.74% for Q2 and 2.76% for H1 FY 2026-2027.
• Prudential provisioning flattered optics — ~Rs.1,300 crore on NPAs/standard assets plus ~Rs.3,000 crore contingency provisioning against bond/equity price fluctuations; management stressed the build is not asset-quality driven.

RAM-Led Expansion; FCNRB as Stored Liquidity

• Global business crossed Rs.32 lakh crore — Rs.32.58 lakh crore in Q2 FY 2026-2027, up 17.2% YoY; global advances +18.3% YoY (domestic +13.5%, international +39.7%).
• RAM growth outpaced corporate — organic retail +18.6%, agriculture +19%, organic MSME +21.3% YoY vs corporate loans +6.3%; within retail, auto +27.8% and mortgages +20.3% led.
• Deposits up 16.4% YoY (domestic +16.6%, international +14.9%); domestic CASA +10.4% and term deposits +20.5%; domestic CASA ratio at 36.37% as of 30 September 2026 (37.37% cited in the guidance discussion, >38.36% excluding FCNRB).
• $8.08 billion mobilized under the FCNRB window — proceeds parked as "stored liquidity" rather than substituting other deposits, earmarked for busy-season liquidity needs in Q3 and Q4 FY 2026-2027.
• Rs.77,000 crore FCNR mobilization not used to liquidate bulk deposits — bulk outstanding reduced only ~Rs.10,000 crore vs Q1 FY 2026-2027; the bank is not borrowing against SLR and holds significant excess SLR; CEO said the entire Rs.77,000 crore is available to fund asset growth.
• Domestic credit-deposit ratio down 323 bps to 80.08% — reflecting the deposit build ahead of H2 FY 2026-2027 deployment.
• Gold loan momentum cooled — sequential growth roughly flat in Q2 FY 2026-2027 vs 8.5% in Q1 FY 2026-2027; retail gold degrown YTD FY 2026-2027 while agri gold grew ~8% QoQ; management is pacing the book mindful of the market-wide discussion on gold loans.

Pristine Headline Metrics, Deliberate Buffer Build

• GNPA at 1.78% (down 38 bps YoY) and net NPA at 0.37% (down 20 bps) in Q2 FY 2026-2027; PCR including technical write-offs at 94.65% (+144 bps YoY).
• Slippage ratio at 0.69% in Q2 FY 2026-2027 (down 22 bps) and 0.67% for H1 FY 2026-2027; SMA 1 & 2 book reduced to 0.06% of standard advances (vs 0.39% in June 2025); collection efficiency ex-agriculture at 99.2%.
• Credit cost at 55 bps for Q2 FY 2026-2027 — would have been 18 bps excluding potential provisioning; 42 bps for H1 FY 2026-2027; specific provisions stood at 18 bps in Q2 after a minuscule Q1 FY 2026-2027 level.
• Rs.1,300 crore additional specific provisions created — CEO D. Chand said this buffers the recurring ECL impact (distinct from the one-time CRAR impact), is loan-asset-specific, and explicitly denied any link to the account referenced from the Q1 FY 2026-2027 call.
• Rs.300 crore contingency provision against bond/equity valuation swings — preparing for the immediate Q3 FY 2026-2027 impact; the Rs.1,300 crore excess-over-IRAC provision can be utilized for ECL and for Q3 and Q4 FY 2026-2027 depending on market headwinds.
• ECL transition mechanics — CFO Sridhar said the ECL framework is a total change in provisioning, so standard vs non-standard numbers cannot be specified; per the RBI dispensation, additional requirement at migration can be adjusted against reserves with elongation over five years, which the bank will take advantage of.
• Prior ECL estimate not revised — management had indicated in the Q1 FY 2026-2027 call a potential ~110 bps impact (~Rs.12,000 crore) with a Rs.2,500 crore buffer built in Q4 FY 2025-2026; no revised quantum was provided in this exchange.

NIM Guidance Held; Fee Income a Work in Progress

• NIM guidance maintained at 2.75-2.95% for FY 2026-2027 — management hopeful of achieving the higher band in Q3-Q4 FY 2026-2027; yield on advances at 7.41% in Q2 (+4 bps QoQ); cost of deposits at 4.71%, slightly higher but contained.
• 38% of the book is repo-linked — already seeing interest income upside from the repo hike effective 5 October 2026; the non-MCLR corporate book repriced in Q2 FY 2026-2027 with full benefit expected in Q3 FY 2026-2027.
• Fee income remains below prior-year levels — Q1 FY 2026-2027 was muted/depressed, Q2 saw a pullback but is still lower than Q2 FY 2025-2026; Head - Finance Bina White said the bank is re-looking its entire fee structure and expects upside in Q3-Q4 FY 2026-2027.
• Recoveries from technical write-offs at Rs.729 crore in Q2 FY 2026-2027 — management guided to a normalized run rate of Rs.750 crore and is hopeful of achieving it in both Q3 and Q4 FY 2026-2027; for FY 2027-2028 and beyond, the MD & CEO said sustaining the run rate is "slightly tough" with no commitment given.
• Treasury valuation computed on the combined book including NSC — total effect of Rs.3,100 crore in Q2 FY 2026-2027: Rs.1,300 crore-odd cash profit plus ~Rs.1,800 crore valuation, with NSC valuation higher than Rs.1,800 crore.
• IT refund recognized in Q2 FY 2026-2027 was only Rs.290 crore — the CEO described this as minimal compared to earlier quarters; FCNR fee income for Q2 was not available on the call and will be shared later.

New Entities, Digital Push, Elevated Cyber Vigilance

• Two new entities planned — a securities/gilt subsidiary covering PD and DCM businesses, and a pension fund business.
• Bob World 2 app launched — AI-powered with voice feature, personal finance manager and persona-based design; a "Cyber Biru" mascot will build customer cybersecurity and digital literacy.
• ~10% of operating profit earmarked for IT in FY 2026-2027 — with the IT department permitted up to 15%; large-scale IT hiring underway and discussions on with a globally large tech company to strengthen security further.
• Security architecture significantly revamped — ED Sanjay Mudaliar affirmed preparedness with tight oversight of infrastructure and ecosystem after the bank's own past incident; CEO noted threats are evolving globally and the bank remains "on edge" with continuous vigilance, against the backdrop of a recent cyber incident at another bank and upcoming DPDP implementation.
• Bank now the second-largest PSU bank by business after State Bank of India — with the gap to the next PSU bank widening (analyst remark on the call).

Guidance Upsized; H2 FY27 Execution Is the Test

• FY 2026-2027 credit growth guidance raised to 13-15% (from 12-14%) and deposit growth to 11-13% (from 10-12%); credit cost guidance <0.6% (Q2 FY 2026-2027 at 0.55%); slippage guidance held at 1-1.25%.
• H2 FY 2026-2027 credit math — at the 15% upper band, ~Rs.2,14,000 crore of FY27 incremental credit, of which Rs.82,000 crore was added in H1 FY27 (Q1 FY27 credit growth was marginally negative), leaving ~Rs.1,30,000 crore for H2; CEO D. Chand called this "quite achievable", comparable to the Q3+Q4 FY 2025-2026 run-rate.
• H2 pipeline — ~Rs.60,000 crore incremental RAM book expected plus a corporate pipeline of ~Rs.60,000 crore for the December and March busy season; unutilized FCNR(B) held as stored liquidity to fund growth.
• Deposit growth needs a substantial H2 pickup — FY27 target of 13% with Rs.96,000 crore mobilized in H1 FY27 (analyst flagged the required acceleration).
• ROA outlook — management expects ROA above 1% across Q2-Q4 FY 2026-2027 and is hopeful of near-1% ROA for full-year FY 2026-2027 (guidance had been on hold after the Q1 FY 2026-2027 profit dip from a settlement issue); ROE at 19.28% versus guidance of 15-16% for FY 2026-2027.
• Drought restructuring contingent on government/SLBC — CEO D. Chand said such schemes are designed by the SLBC in consultation with the government, and as of the call no scheme had been announced by the drought-affected states; banks including Bank of Baroda will be guided by any such scheme when announced.
• Open items — bond portfolio MTM impact for Q2 FY 2026-2027 (P&L and AFS) was not available on the call; ED Lalit Tyagi committed to revert; analyst Gaurav's question went unaddressed due to technical difficulties.