Buy Federal Bank; target of Rs 175: YES Securities

YES Securities is bullish on Federal Bank has recommended buy rating on the stock with a target price of Rs 175 in its research report dated July 13, 2023.

Broker Research

July 14, 2023 / 11:34 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

YES Securities' research report on Federal Bank

Asset quality: Gross slippages amounted to Rs 5.01bn (annualized slippage ratio of 1.1%) and recoveries and upgrades were at Rs 2.46bn Margin picture: NIM at 3.15% was down -16bps QoQ largely due to timing mismatch in the rise of cost of deposits versus yield on advances Asset growth: Advances grew 5.2%/20.9% QoQ/YoY driven sequentially by Agri, Business Banking, CV/CE and Commercial Banking loan segments Opex control: Total opex rose 3.1%/24.4% QoQ/YoY, staff expenses rose 3.3% /23.5% QoQ/YoY and other expenses rose 2.9%/25.2% QoQ/YoY Fee income: Fee income fell/rose -2.3%/33.6% QoQ/YoY, sequentially driven lower by Banking Comm. & Exch. Fee, Para Banking and Gen. Service charges.

Outlook

We maintain ‘Buy’ rating on FED with an unchanged price target of Rs 175: We value the standalone bank at 1.2x FY25 P/BV for an FY24E/25E/26E RoE profile of 15.0%/15.1%/15.6%. We assign a value of Rs 8.7 per share to the subsidiaries, based on SOTP.

For all recommendations report, click here