Sharekhan recommended hold rating on Federal Bank with a target price of Rs 84 in its research report dated September 18, 2018.
Sharekhan's research report on Federal Bank
Federal Bank has 32% of its advances and has 48% of its branches situated in Kerala. Management expects bad loans from Kerala to go up by 20-30% due to the recent floods in the region. However, players such as Federal Bank may see an uptick in deposit flows as relief aid money pours in for relief and rehabilitation. Due to the recent Kerala floods, we believe the next 1-2 quarters may see a likely rise in NPAs for the bank.
We downgrade our recommendation on Federal Bank to Hold with a revised PT of Rs.84.
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