Buy Federal Bank, target price Rs 115: Axis Securities

Axis Securities has buy call on Federal Bank with a target price of Rs 115. The current market price of Federal Bank Ltd. is Rs 90.75. Time period given by analyst is one year when Federal Bank Ltd. price can reach defined target.

Federal Bank Ltd., incorporated in the year 1931, is a banking company (having a market cap of Rs 18775.74 Crore).

Federal Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 4170.55 Crore, up 1.10 % from last quarter Total Income of Rs 4125.30 Crore and up 4.36 % from last year same quarter Total Income of Rs 3996.43 Crore. The bank reported net profit after tax of Rs 587.54 Crore in latest quarter.

Investment Rationale
Key positives are increasing retail focus, strong fee income, adequate capitalization, and prudent provisioning. It expects steady provision requirements along with healthy growth in the balance sheet and NIMs to deliver RoA/RoE of 1.1%/13.5% by FY24E. It maintains a BUY with a target price of Rs 115/share (1.1x FY24E ABV).

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of 31-Mar-2022, while FIIs owned 26.01 per cent, DIIs 43.25 per cent.