Shares of Bank of Baroda are trading at the highest level since August 2015 after brokerage call Citi raised its price target on the state-run lender.

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Citi maintained its buy rating on the stock and raised its price target to Rs 245 from Rs 220 earlier. The revised price target implies a potential upside of 23 percent from Monday's close.

The stock has gained nearly 10 percent in the past one month and has more than doubled in the past one year.

Citi has mentioned that it is confident that the lender can deliver credit growth of 14-15 percent year-on-year, which is 1-2 percent higher than the industry average and NIMs of 3.3 percent. The brokerage has revised its earnings estimates for Bank of Baroda higher by 8-9 percent for financial year 2024 and 2025 respectively.

“Scale-up of unsecured loans (from 1.2 percent), focus on APF (approved project finance) within home loans, and broad-based growth in other retail segments will sustain retail growth at 1.5x of asset growth,” Citi said in its report.

On Monday, reports said that Bank of Baroda was planning to sell up to 49 percent stake in its credit card business arm BOB Financial Solutions Ltd. Currently, it is 100 percent owned by the lender.

The bank has already floated a request for proposal for roping in a strategic investor, and the process is expected to complete in one year, the report mentioned quoting a senior bank official.

Another brokerage that raised its price target on the state-run lender is DAM Capital, who now expects the stock to reach Rs 250 in the next 12 months, from Rs 230 earlier. It said that Bank of Baroda could outpace its other state-run peers with Return of Assets of 1.15-1.2 percent over financial year 2024-2025. It expects this performance due to benefits from a strong transition undertaken over the last 3-5 years.

DAM Capital expects financial year 2024 to be another benign year of asset quality for Bank of Baroda, adding that stake sale in its subsidiaries will provide it with a strong capital base.

Shares of Bank of Baroda gained as much as 1.3 percent to Rs 201.65. The stock is up for the third day in a row.