Federal Bank - Going From Strength To Strength: Axis Securities

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Axis Securities Report.With a strong start to FY25, Federal Bank Ltd. remains well-positioned to sustain its growth momentum throughout the year, supported by healthy demand. The bank intends to focus on growth opportunities where the risk-reward profile is favorable. The bank aims to replicate its credit growth in deposits through focused efforts, including expanding its branch network, enhancing CA propositions, launching new products, driving digital initiatives, and refining scorecards for on-ground staff. While we believe Federal Bank remains well positioned to deliver a sustainable return on asset of 1.3%, improving net interest margins backed by shifting portfolio mix towards higher-yielding products would be a key enabler for the bank to deliver RoA of 1.4% by FY27E and would drive the next leg of stock re-rating. We expect Federal Bank to deliver RoA/RoE of 1.3-1.35%/14-16% over FY25-27E supported by steady NIMs, gradually improving the Opex ratio and stable credit costs (~30- 35 basis points). Additionally, the appointment of Mr. KVS Manian, a veteran banker with rich experience of nearly three decades should help the bank deliver on strategy and ensure strong sustainable growth. Adjusting for the numbers published in the annual report, we make minor tweaks to our estimates, while broadly maintaining them over FY25-27E. We reiterate our Buy recommendation on the stock with a target price of Rs 230/share (1.5 times FY26E adjusted book value on core book and a subsidiary value of Rs 12), implying an upside of 16% from the current market price..Click on the attachment to read the full report:.IPO Rush: Seven New Issues, Five Listings To Hit Street This Week.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Federal Bank - Going From Strength To Strength: Axis Securities

The appointment of Mr. KVS Manian, a veteran banker with rich experience of nearly three decades should help the bank deliver on strategy and ensure strong sustainable growth, says the brokerage.

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP

Federal Bank - Going From Strength To Strength: Axis Securities

The appointment of Mr. KVS Manian, a veteran banker with rich experience of nearly three decades should help the bank deliver on strategy and ensure strong sustainable growth, says the brokerage.

Choose a plan

Follow Us

DOWNLOAD THE APP