Sharekhan's research report on Federal Bank
Federal Bank expects to sustain healthy performance led by an improved loan growth outlook (16-18%), steady asset quality performance, and in turn lower core credit cost. The bank has guided for credit cost ~60 bps. The bank indicated that the loan growth is expected to be broad-based across Retail, Agri, Corporate & SME. The focus is to maintain a strong granular liability franchise. A higher mix of floating loans, improving credit-deposit (CD) ratio and higher retail deposits will support margins in a rising interest rate environment.
Outlook
At CMP, the stock trades at 1.2x and 1.1x its FY2023E and FY2024E ABV, which we believe is reasonable, given the improved return ratio outlook. We maintain Buy with a revised PT of Rs. 140.
More Info
At 14:33 hrs Federal Bank was quoting at Rs 118.65, up Rs 1.65, or 1.41 percent.
It has touched an intraday high of Rs 118.75 and an intraday low of Rs 114.75.
It was trading with volumes of 694,846 shares, compared to its thirty day average of 751,937 shares, a decrease of -7.59 percent.
In the previous trading session, the share closed up 3.45 percent or Rs 3.90 at Rs 117.00.
The share touched its 52-week high Rs 117.85 and 52-week low Rs 78.20 on 30 August, 2022 and 21 September, 2021, respectively.
Currently, it is trading 0.68 percent below its 52-week high and 51.73 percent above its 52-week low.
Market capitalisation stands at Rs 24,985.66 crore.
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