2 weeks Ago
Foreseeing a transition from value to quality in Federal Bank , global brokerage firm Nomura has given a target price of Rs 240, indicating an upside potential of 24%, while maintaining a ‘buy’ rating on the stock . As per the recent update, KVS Manian (ex Joint MD, Kotak Mahindra Bank ) has taken over as the MD & CEO of Federal Bank (FB) last week and at FB, Manian inherits a strong platform – a robust deposit franchise with strong asset quality which, Nomura believes, has not been fully appreciated at current valuations . “Manian has been instrumental in organically building low-risk, high-RoA businesses across consumer and corporate banking verticals at KMB (Fig.
1 ), and this expertise can significantly aid FB’s RoA profile, in our view. At 1.2x FY26F P/B (9x FY26F P/E), we find valuations attractive – FB offers the highest earnings yield among private banks,” said Nomura in its report stating that Federal Bank remains its top mid-cap bank idea.
Regarding inheriting a robust strong platform, Nomura stated that on the retail deposit franchise, the bank has outperformed peers on growth and the Bank also has a demonstrated track record of maintaining strong asset quality – both through the corporate credit cycle and in the recent past. “We believe these aspects have not been fully appreciated by the market despite the recent re-rating,” the global brokerage firm said. Stock Trading Market 101: An Insight into Trendlines and Momentum By - Rohit Srivastava, Founder- Indiacharts.
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In the last one year, the shares of Federal Bank have gained nearly 33% and have increased by 25% in the current calendar year. Around 11:45 am today, the stock was trading 1.2% higher at Rs 195.
80 on the BSE. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel ).
