Prabhudas Lilladher's research report on Federal Bank
FB reported its strongest quarter with beat on all fronts. NII grew by 19% YoY, in tandem with loan growth (+20% YoY) as NIM was at multi-quarter high of 3.6%. Loan growth was broad based with corporate/SME outpacing retail. Competitive intensity in wholesale lending in reducing while private capex demand is improving. FY23 loan growth guidance is 18-20% while NIM target is raised by 5-10bps to 3.3%. Fees were healthier while opex was controlled and cost-income is expected to reduce. Credit quality remains resilient with OTR pool performing well.
Outlook
We raise FY23/24 PAT by 16%/13% each and over FY22-25 earnings could see a 25% CAGR. FB warrants a rerating owing to consistent boost in core profitability. Rolling forward to Sep’24 ABV we raise multiple from 1.4x to 1.5x and raise TP from Rs135 to Rs165. Reiterate BUY.
More Info
At 17:30 Federal Bank was quoting at Rs 130.25, up Rs 5.45, or 4.37 percent.
It has touched an intraday high of Rs 132.10 and an intraday low of Rs 125.10.
It was trading with volumes of 2,517,956 shares, compared to its thirty day average of 1,015,321 shares, an increase of 148.00 percent.
In the previous trading session, the share closed down 0.64 percent or Rs 0.80 at Rs 124.80.
The share touched its 52-week high Rs 132.10 and 52-week low Rs 78.70 on 14 October, 2022 and 27 December, 2021, respectively.
Currently, it is trading 1.4 percent below its 52-week high and 65.5 percent above its 52-week low.
Market capitalisation stands at Rs 27,477.46 crore.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.