Buy Federal Bank; target of Rs 65: Motilal Oswal

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Motilal Oswal 's research report on Federal Bank

Federal Bank (FB) reported moderation in 4QFY20 business growth affected by the weak environment. The bank made higher COVID-19 related provisions of INR930m, which dragged earnings in the quarter. PPoP was strong at 27% YoY (aided by treasury gains) while moratorium book stood at 35%. Lower slippages (as FB availed dispensation given by the RBI) and higher provisions, resulted in overall improvement in asset quality/PCR. We have cut our FY21E estimates sharply by 19% as we factor in higher credit cost and slight moderation in business growth. However, we largely maintain our FY22E estimates. Maintain Buy.

Outlook

We estimate FB to report RoA/RoE of 0.9%/10.9% by FY22E. Maintain Buy with a revised TP of INR65 (0.8x FY’22E ABV).

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More