We see immense scope for a valuation rerating of Federal Bank, given its undemanding valuation at 0.9x FY24 adjusted book. And the current volatility in the market presents a buying opportunity
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
– 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’s (CMP: Rs 91.70, Market cap: Rs 19,289 crore) March quarter earnings were a tad softer than expected, impacted by family pension provision, lower non-interest income on account of loss on revaluation of security receipts and lower interest margin due to higher slippage from the agri portfolio. However, the stock has held up well, outperforming the Nifty as well as the Bank Nifty in the past four-and-a-half months. We feel that the best is yet to come, and…
