Prabhudas Lilladher has maintained 'Buy' on Bank of Baroda (BoB) with target price of Rs 220 with current market price (CMP) of Rs 170 in its report.

Commenting on the investment rationale, Prabhudas Lilladher said, ''BOB results brought the much needed sigh of relief after disappointing results from PNB which portrayed a wash-out earnings season for PSU banks this quarter. Asset quality surprised positively, with GNPL increasing by modest 5% QoQ, while NNPL declined by 3% QoQ. GNPL/NNPL ratios, thus, declined by 13bps QoQ/22bps QoQ, respectively, while coverage ratio improved 403bps QoQ to over 50%.

Fresh slippages declined over 40% QoQ to 1.8% annualized (including debits in NPL accounts), while fresh restructuring stood at Rs 40 billion (appears much more manageable than PNB's Rs 78.8 billion of fresh restructuring) leading to a standard restructured portfolio of 6.1% (5.9% in Q3FY15).

BOB results have rekindled hopes of a better asset quality performance from other PSU banks even as the management maintained its cautiously optimistic stance. We maintain 'BUY' with PT of Rs 220.''

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