Q3 results: Should you buy Federal Bank shares after Q3 earnings? Here’s what brokerages say
₹145.80 apiece on the BSE. Federal Bank registered a 25.3% growth in its net profit for the third quarter of FY24 at ₹1,006.74 crore as compared to ₹803.61 crore in the corresponding quarter of last year. The bank’s net interest income (NII) in Q3FY24 increased 8.5% to ₹2,123.4 crore from ₹1,956.5 crore, YoY.
Net interest margin (NIM) during the December quarter fell to 3.19% from 3.22% in September quarter. Read here: Federal Bank Q3 Results: Net profit up 25% to ₹1,007 crore, NII grows 8.5% YoY Most analysts remain bullish on Federal Bank shares after Q3 results. Here’s what brokerages have to say: Federal posted Q3FY24 NII in line, but a beat on PAT driven by higher trading gains from a stake sale in Fedbank Financial Services.
NIM edged down 3 bps QoQ to 3.19%, which is good given tight deposit-taking in the system, Nuvama institutional Equities noted. Federal Bank stock is trading at 1.1x BV FY25E adjusted for FEDFINA. The brokerage believes it can trade up to 1.25x.
It has built in moderation in RoA for FY25E/26E on normalizing credit cost and RBI’s nudge on LDR. Given inexpensive valuation and a low-risk, well-balanced business model, Nuvama retained ‘Buy’ rating on the stock and raised the target price to ₹185 per share from ₹180 earlier, based on 1.3x one-year forward earnings and ₹13 for FEDFINA. “Federal will announce a new CEO shortly (incumbent retires in Sep-24).
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