We see immense potential for rerating of Federal Bank
PRO Only Highlights
– Quarterly performance largely backed by improved realisations
– Medium-term triggers China plus and protectionist measures for tyre industry
– Valuations not inexpensive; but improved medium-term outlook
Federal Bank (CMP: Rs 85.4, Market Cap: Rs 17,048 crore) continues to impress with steady execution in a difficult operating environment. Asset quality, the Achilles heel of the banking sector, continues to remain manageable with the company using treasury windfall to beef up provisions. Business continues to get granular and retail focused and the bank has added a marquee shareholder — IFC — that provides it adequate capital buffer for the post-pandemic growth. The extension of the term of…
