Federal Bank share price falls over 4%; here's what brokerages expect from Federal Bank's Q1FY24 results today
₹135.50 against the previous close of ₹134.20 and fell 4.55 per cent to the intraday low of ₹128.10 in trade so far. The stock suffered losses in trade today ahead of its quarterly results even as brokerage firms expect the lender to report a healthy set of numbers for Q1FY24. Brokerage firm Kotak Institutional Equities expects the bank's net interest income (NII) growth at nearly 22 per cent year-on-year (YoY) with NIM (net interest margin) marginally lower quarter-on-quarter (QoQ).
The brokerage firm expects Federal Bank's profit after tax (PAT) for the June quarter to rise 30.4 per cent YoY and operating profit growth of nearly 23 per cent YoY on the back of better cost ratios as well. "We expect slippages at nearly 1.5 per cent of loans ( ₹650 crore) with no major large-ticket loans. The gross NPL (nonperforming loans) ratio is expected to be flat QoQ.
The key discussion points would be (1) liability-side challenges, (2) near-term outlook on growth and (3) near-term normalisation of RoA (return on assets) and RoEs (return on equities)," Kotak said. On the other hand, brokerage firm Motilal Oswal Financial Services expects a 22.4 per cent YoY rise in the bank's NII while operating profit may rise 34.4 per cent YoY. The estimates of the brokerage firm show Federal Bank's profit for Q1FY24 may jump as much as 40.3 per cent YoY.
"Federal Bank's credit growth remains healthy, driven by robust growth from new businesses and fintech partnerships. We expect the costs of funds to increase and CAR (capital adequacy ratios) to moderate further," Motilal Oswal said. As per the brokerage firm, Federal Bank's asset quality and loans under restructuring are key monitorable.
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