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Buy Federal Bank; target of Rs 120: Anand Rathi

Buy Federal Bank; target of Rs 120: Anand Rathi
October 25
13:24 2021

Anand Rathi is bullish on Federal Bank has recommended buy rating on the stock with a target price of Rs 120 in its research report dated October 24, 2021.

Broker Research

October 25, 2021 / 12:30 PM IST

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Anand Rathi’s research report on Federal Bank

Lower provisions counterbalanced higher opex and lower non-interest income, which led to a sharp ~50% y/y increase in Federal Bank’s Q1 earnings. Slippages and restructuring at ~Rs13bn were lower than anticipated, given the high impact of the bank’s home state due to restrictions related to the pandemic and recent floods. With the lower formation of stress than earlier envisaged, recoveries in earnings would be better. Given the bank’s strong liability franchise and capitalisation, it is set to gain market share in the near term.

Outlook

We maintain our positive view on it with a Rs120 target, valuing it at 1x P/ABV on its FY24e book.

For all recommendations report, click here

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