Anand Rathi 's research report on Federal Bank
Higher treasury income (stake sale of Yes bank) and NIM expansion led to strong 29% sequential growth in Federal Bank’s Q4 operating profits. Higher provisions (incl. `930m Covid-related) led to a ~32% q/q decline in earnings. Asset quality and PCR improved. Ahead, higher build-up of stress would keep credit cost high and profitability subdued in the medium term.
We cut our P/ABV multiple to 0.8x (earlier 1.3x), with a lower TP of `55 (earlier `110).
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