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Buy Federal Bank; target of Rs 115: Anand Rathi

Anand Rathi is bullish on Federal Bank has recommended buy rating on the stock with a target price of Rs 115 in its research report dated May 09, 2022.

May 12, 2022 / 07:19 PM IST
 
 
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Anand Rathi's research report on Federal Bank


Lower margins, less Treasury income and higher opex led to a ~500bp weakened C/I ratio; moderating provisions, however, counterbalanced the weak operating performance keeping RoA at 1% for Federal bank. Asset quality improved as slippages were less than anticipated. 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 Rs.115 target, valuing it at 0.9x P/ABV on its FY24e book.

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first published: May 12, 2022 07:19 pm
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