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Today's prices ask more of Punjab National Bank than of Bank of Baroda.
At current prices, buyers of Bank of Baroda are assuming about 11.4% return on equity against 13.8% in its own record; for Punjab National Bank it is 13.4% against 11.5%. That shows which share needs more to go right — not which is cheaper. How far each trades from its estimated fair value is in the full valuations.
- Valuation method: both on excess return.
- Size: the two are worth roughly the same on the stock market.
- Record: Punjab National Bank has grown revenue faster: Bank of Baroda compounded at about 9% a year (FY2020–FY2026) and Punjab National Bank at about 14% (FY2019–FY2026).
- What to watch: return on equity at Bank of Baroda; credit costs at Punjab National Bank.
| Bank of Baroda | Punjab National Bank | |
|---|---|---|
| Price | ₹274 | ₹143 |
| Market cap | ₹1.42L Cr | ₹1.64L Cr |
| P/E | 7.2 | 7.2 |
| P/B | 0.85 | 1.09 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Excess return | Excess return |
01Two businesses
The second-largest public-sector bank
Bank of Baroda, founded in 1908 in Vadodara (then Baroda), is one of India's largest public-sector banks and is majority-owned by the Government of India. It merged with Vijaya Bank and Dena Bank in 2019, and has a larger overseas presence than most Indian banks.
A century-old bank, rebuilt
Punjab National Bank, founded in Lahore in 1894, is one of India's largest public-sector banks and is majority-owned by the Government of India. In 2020 it absorbed Oriental Bank of Commerce and United Bank of India.
02The records side by side
Punjab National Bank has grown revenue faster: Bank of Baroda compounded at about 9% a year (FY2020–FY2026) and Punjab National Bank at about 14% (FY2019–FY2026). By revenue the two are of broadly similar size. Bank of Baroda kept 12.4% of revenue as net profit in FY2026; Punjab National Bank kept 11.4% of revenue as net profit in FY2026. Bank of Baroda was profitable in every year shown; Punjab National Bank reported a net loss in FY2019.
Full ten-year tables and charts are on each company's page: Bank of Baroda · Punjab National Bank.
03What each price assumes
Work backwards from each share price and you can see what buyers are taking for granted — the rate each company must sustain to justify what it costs, against what its own record supports.
04What decides each one's value
- Return on equityWhether recent returns hold through a full credit cycle.
- Credit costsProvisions on bad loans swing state-bank profits more than anything.
- Credit costsLower provisions have driven the profit recovery.
- Return on equityWhether returns hold through the next credit cycle.
05What could go wrong
- Corporate creditA turn in the corporate cycle would hit provisions first.
- Policy lendingGovernment priorities can shape lending and pricing.
- Asset qualityA new wave of bad loans would reverse the gains.
- ControlsThe 2018 fraud showed the cost of weak controls.
06Which is better value?
Sign in free to see which trades further below its worth
- ✓Both fair values per share — each on the method that fits the business
- ✓Every step of both workings — growth, margins and cost of capital, with sources
- ✓Bull, base and bear cases — for each company
- ✓Downloadable reports — the full write-up for each, yours to keep
08Questions people ask
Is Bank of Baroda or Punjab National Bank better value?
That turns on how far each share trades from its estimated fair value. Both figures, with every step of the working, are in the full valuations, free to view once you sign in. On the public numbers, Bank of Baroda trades at 7.2 times earnings and 0.85 times book value, and Punjab National Bank at 7.2 times earnings and 1.09 times book value — but multiples alone mislead when two businesses work differently, which is why each is valued on the method that fits it.
What is the difference between Bank of Baroda and Punjab National Bank?
Bank of Baroda, founded in 1908 in Vadodara (then Baroda), is one of India's largest public-sector banks and is majority-owned by the Government of India. Punjab National Bank, founded in Lahore in 1894, is one of India's largest public-sector banks and is majority-owned by the Government of India.
Are Bank of Baroda and Punjab National Bank valued the same way?
Yes — both on excess return, so their workings compare like for like.
What does today's price assume for Bank of Baroda and Punjab National Bank?
Worked backwards from the share price, Bank of Baroda needs about 11.4% return on equity and Punjab National Bank about 13.4% return on equity, against 13.8% and 11.5% in their own records.