Federal Bank Ltd., incorporated in the year 1931, is a banking company (having a market cap of Rs 17087.07 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
FB is well placed to deliver an expansion in RoE led by continued improvements in margins, opex and credit cost. The strong liability franchise will enable lower cost of funds while controlled branch expansion and rising use of technology will enable further moderation in cost-ratios. Asset quality performance has been steady with slippages for FY21 broadly similar to pre-pandemic levels while coverage ratios have strengthened to ~66% (the highest among midsize peers). A turnaround in the corporate cycle would also be favorable. The brokerage expects credit cost to moderate to ~1% by FY23E. Average RoE for the bank has been ~9% over the past six years and with earnings now gaining traction, it estimates RoE to improve to ~14% by FY23E.
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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