Buy Federal Bank; target of Rs 105: Anand Rathi

Anand Rathi 's research report on Federal Bank

With advances/deposits/PPOP growing 25%/22%/20%, Federal Bank reported a stable quarter. Slippages were contained below 2% despite business disruption due to floods in Kerala. We expect the strong momentum in its balance sheet to persist, with a gradual decline in its credit cost boosting profitability in the medium term. We retain a Buy.

Outlook

Our Oct?19 sum-of-parts target (1.4x FY20e adjusted book value, `12.8 a share for Fedfina and IDBI-Federal Life) works out to `105 a share.