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Federal Bank Ltd., incorporated in the year 1931, is a banking company (having a market cap of Rs 10392.26 Crore).
Financials
The Bank reported a Gross Non Performing Assets (Gross NPAs) of Rs 3591.72 Crore (.00 % of total assets) and Net Non Performing Assets (Net NPAs) of Rs 1249.85 Crore (.00% of total assets). For the quarter ended 30-09-2020, the company reported a Consolidated Interest Income of Rs 2853.76 Crore, up .92 % from last quarter Interest Income of Rs 2827.74 Crore and up 4.88 % from last year same quarter Interest Income of Rs 2720.87 Crore. The bank reported net profit after tax of Rs 315.70 Crore in latest quarter.
Investment Rationale
Bank reported an impressive collection efficiency for the quarter. Overall collection efficiency now stands at 95% and back to February 2020 levels which is promising. It expects NII/PAT to grow at a CAGR of 10% /13% on the back of 11% CAGR growth in advances after factoring in Covid led uncertainties. It believes that bank is well capitalised amongst peers with a Capital adequacy of 14.64% to deal with fresh slippages arising from Covid 19 uncertainties .It maintains buy rating on the stock based on 0.8x Adj.BV of FY22E with a revised upward target price of Rs.65.
Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of Sept 30, 2020, while FIIs held 30 per cent, DIIs 30 per cent and public and others 40 per cent.
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