Federal Bank Q4 Results Review - One-Time Cost Hurts Earnings; Strong Outlook For FY25: 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.Federal Bank Ltd.'s reported healthy credit growth of 20/5% YoY/QoQ. Federal Banks higher-yielding portfolio contributes ~24.6% of the total portfolio versus 21.8% YoY. Deposit growth improved to 18/5% YoY/QoQ, driven by TDs (plus 24/7% YoY/QoQ) as current account savings account deposit growth was muted (plus 6/1% YoY/QoQ). Thus, the CASA ratio declined to 29.4% versus 32.7/30.6% YoY/QoQ.Net interest income grew by 15/3% YoY/QoQ. Cost of Deposits inched up by 17 basis points QoQ, while yields improved by 11 bps during the quarter. Net interest margin improved by 2 bps QoQ and stood at 3.21%. Noninterest income grew by 3% YoY; however, it was down 13% QoQ as Q3 FY24 had a one-time gain from a stake sale in FedFina. Employee expense was significantly higher at 49/28% YoY/QoQ, reflecting the impact of one-time employee cost to the tune of Rs 162 crore. Resultantly, C-I Ratio climbed to 62.3% versus 49.5/51.9% YoY/QoQ. Higher Opex weighed on pre-provision operating profit growth, which de-grew by 17/23% YoY/QoQ.Provisions came in lower-than-expected, supporting earnings. The Federal Bank reported a provision write-back of ~Rs 95 crore. profit after tax remained flat YoY and de-grew by 10% QoQ. Return on assets stood at 1.22%. Gross non-performing assets improved by 16 bps to 2.13% on the back of lower slippages (slippage ratio of 0.7% versus 1% YoY/QoQ) and strong granular recoveries. Restructured book tapered to 1% versus 1.1% QoQ..Click on the attachment to read the full report:.Passenger Blocked By Ticketless Passengers In 1st AC Coach, Shares 'Horror' Story.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 Q4 Results Review - One-Time Cost Hurts Earnings; Strong Outlook For FY25: Axis Securities

Asset quality challenges in the higher-yielding segment could potentially impact our earnings estimates.

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Federal Bank Q4 Results Review - One-Time Cost Hurts Earnings; Strong Outlook For FY25: Axis Securities

Asset quality challenges in the higher-yielding segment could potentially impact our earnings estimates.

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