Indian state-owned lender Bank of Baroda Ltd reported a record quarterly profit on Tuesday, helped by an increase in interest income.

The lender, India's No.3 among public sector banks in terms of assets under management (AUM), said its net profit nearly tripled to 47.75 billion rupees (about $584 million) in the January-to-March quarter, from 17.79 billion rupees a year ago.

Analysts, on average, had expected profit to rise to 40.25 billion rupees, according to Refinitiv IBES.

The bank's net interest income—the difference between interest earned and paid—rose 34% to 115.25 billion rupees, beating analysts' estimate of 111.32 billion rupees.

Its net interest margin rose to 3.53% from 3.08% a year ago.

That, said the bank, along with a subdued rise in operating costs bolstered its profit growth.

Bank of Baroda's non-performing assets (NPA), net interest income, and net interest margin—all metrics that indicate a bank's financial health—improved sequentially.

Its gross NPA ratio fell to 3.79% in the fourth quarter, from 4.53% in the previous quarter, while its net NPA ratio fell to 0.89% from 0.99%.

Its provisions, or money set aside for bad loans and contingencies, fell 62% to 14.21 billion rupees.

The strong and sustainable improvement in asset quality led to a record-low credit cost of 0.14% in the quarter, the lender said.

State Bank of India and Punjab National Bank , India's No.1 and No.2 public sector banks by AUM, respectively, are due to report results later this week.

Bank of Baroda's shares rose as much as 2.53% to a two-week high after the results. They fell 9% in the January-March quarter against a 14% fall in the public sector bank index . ($1 = 81.7800 Indian rupees) (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman)