AgenciesMotilal Oswal Financial Services has buy call on Federal Bank with a target price of Rs 170. The current market price of Federal Bank is Rs 132.55.
Federal Bank, incorporated in the year 1931, is a banking company (having a market cap of Rs 27764.31 Crore).
Federal Bank key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest and Interest On Balances with RBI and Other Inter-Bank Funds for the year ending 31-Mar-2022.
Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 5262.58 Crore, up 7.69 % from last quarter Total Income of Rs 4886.58 Crore and up 27.57 % from last year same quarter Total Income of Rs 4125.30 Crore. The bank has reported net profit after tax of Rs 843.25 Crore in latest quarter.
Investment Rationale
The brokerage believes that the bank is well placed to deliver RoA expansion, led by controlled credit costs and a rise in the mix of high-yielding segments. Moreover, the bank’s strong liability franchise will help it lower the cost of funds, which should support margins.
Federal Bank, incorporated in the year 1931, is a banking company (having a market cap of Rs 27764.31 Crore).
Federal Bank key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest and Interest On Balances with RBI and Other Inter-Bank Funds for the year ending 31-Mar-2022.
Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 5262.58 Crore, up 7.69 % from last quarter Total Income of Rs 4886.58 Crore and up 27.57 % from last year same quarter Total Income of Rs 4125.30 Crore. The bank has reported net profit after tax of Rs 843.25 Crore in latest quarter.
Investment Rationale
The brokerage believes that the bank is well placed to deliver RoA expansion, led by controlled credit costs and a rise in the mix of high-yielding segments. Moreover, the bank’s strong liability franchise will help it lower the cost of funds, which should support margins.
The lender plans to add branches in a calibrated manner and improve its digital capabilities, which should drive operating leverage. The brokerage estimate an earnings CAGR of 16% overFY23-25 with RoA/RoE of 1.3%/15.2% by FY25.
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