Anand Rathi is bullish on Federal Bank has recommended buy rating on the stock with a target price of Rs 55 in its research report dated May 29, 2020.
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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