BQ Prime’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 BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Nirmal Bang Report
We think that Federal Bank Ltd. continues to offer attractive risk-reward despite stock return of ~25% in the last six months and 41% run-up since June 2022 low.
The stock is currently trading at 1.1 times/1 time FY24E/FY25E adjusted book per share while we think it has potential to deliver 1.2% return on asset and ~14% return on equity over the next two-three years.
Federal Bank had last delivered more than 13% ROE in FY15, post which its return profile has declined due to deterioration in net interest margins and higher credit cost.
Some of the most notable concerns around the bank have been its ability to improve NIMs and control lumpy and unpredictable slippages. Up to FY25E, we estimate the bank’s NIMs to expand by 23 basis points cumulatively on the back of larger share of margin-accretive retail loans.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime 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 BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
As a Subscriber you get
Stories
RECOMMENDED FOR YOU
POPULAR