Federal Bank Ltd., incorporated in the year 1931, is a banking company (having a market cap of Rs 17117.01 Crore).
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 3996.43 Crore, down -2.26 % from last quarter Total Income of Rs 4088.77 Crore and down -5.36 % from last year same quarter Total Income of Rs 4222.87 Crore. The bank reported net profit after tax of Rs 521.24 Crore in latest quarter.
Investment Rationale
Over FY21, FB delivered a strong core operating performance and healthy business trends across both advances and deposits. Retail loan growth is showing a healthy revival, led by robust trends in Retail loans (Gold, LAP, and Housing). The bank’s liability franchise remains strong, with a Retail deposit mix ~90% and healthy CASA growth, which will continue to aid margin. Asset quality trends were broadly stable QoQ, while slippages in FY21 were broadly similar to pre-COVID levels v/s a much higher deterioration seen in some other midsize Banks. The drop in collection efficiency in Apr-May’21 was broadly similar to other Banks. The brokerage expects FY23E RoA/RoE at 1.1%/14.3%. It reiterates Buy rating with an unchanged TP of INR110 per share (1.1x FY23E ABV).
Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of March 31, 2021, while FIIs held 25.6 per cent, DIIs 42.7 per cent and public and others 31.7 per cent.
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