Buy Federal Bank target of Rs 110: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on Federal Bank

The stock trades at inexpensive valuations and offers scope of re-rating as the earnings cycle recovers. The bank posted strong results for Q3 FY20 with a sharp decline in net stressed loans to ~2.3% of loans (down by 14 BPS q-o-q) in Q3 FY20, helped by the resolution of a large restructured account in the airline sector. We believe incremental loans to better-rated borrowers, no addition to the stressed pool, and high provision coverage are positives, but asset-quality performance and margins will continue to be key monitorables.

Outlook

We maintain Buy rating on Federal Bank with a revised target price of Rs 110.

For all recommendations report, click here

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