Buy Federal Bank; target of Rs 95: Sharekhan
Sharekhan is bullish on Federal Bank has recommended buy rating on the stock with a target price of Rs 95 in its research report dated January 20, 2021.
February 01, 2021 / 06:39 PM IST
Sharekhan's research report on Federal Bank
Q3FY21 numbers were encouraging, with healthy operational numbers (helped by sequentially lower provisions) and steady asset quality. GNPA/NNPA fell to 2.71% / 0.6% (from 2.84%/0.99% in Q2FY21), with negligible slippages (due to the SC order). Including proforma slippages, GNPA and NNPA ratios would have been at 3.38% and 1.14%, respectively. We believe that the bank is better placed in terms of book quality, with a 95% collection efficiency and as ~76% of wholesale borrowers are rated ‘A & above’. Credit cost outlook appear to be manageable.
We maintain a Buy on the stock with a revised price target (PT) of Rs. 95.
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