Federal Bank Ltd. share price target

Quarterly Update Q4FY26

Return profile improves gradually on lower cost to income and credit costs. Asset quality improved on the back of higher reductions

Core PPoP beat of 9.5% due to better fees & TWO recovery CASA momentum continues; ratio is up 270bps YoY to ~33% PCR shored up to ~88%; downside risks to provisions FB saw a decent quarter as core PPoP beat PLe by 9.5% due to better fees and TWO recovery. Interest on IT refund of INR 4.6bn was used to shore up PCR QoQ from 76% to 87.8% against likely ECL requirement; credit cost guidance of 50-60bps would be reassessed. We are factoring provisions of 48bps, but there are downside risks. While loan growth was a tad lower; recalibration is progressing well with targeted segments...

We maintain our BUY recommendation on the stock.

Federal Bank reported a strong Q4 underscoring a deliberate pivot toward granular, high-yielding growth while maintaining balance sheet discipline. Advances grew 13% YoY and total business expanded 12% YoY, led by commercial banking and gold loans (~26% YoY each). CASA crossed the Rs 1 lakh cr milestone (up 21% YoY), reflecting strengthening liability franchise. PAT hit a record Rs 1,145 cr (up ~10% QoQ), supported by steady NII and 24% YoY fee income growth. NIM stood at 3.20%, with management focused on defending margins via liability repricing and asset mix. Asset quality is best-in-class with...

Balanced loan mix with retail: wholesale mix of 50:50. FedBank Financial Services (NBFC) is a subsidiary with 60.8% stake Q4FY26 performance: Federal Bank reported decent Q4FY26 performance, though growth remained below system as balance sheet realignment continued. Advances grew ~13% YoY (~3.6% QoQ), led by commercial banking, gold loans, CV/CE and LAP, while corporate book remained flat QoQ due to selective growth and pricing discipline. Deposits grew ~12% YoY (4.6% QoQ), supported by strong CASA traction, though headline deposit growth was moderated by conscious reduction in...

The bank received Rs4.56bn as interest on tax refund in Q4FY26 and created an equivalent floating provisioning, while Rs1.15bn provisioning reversal led to lower tax outgo; adjusting for these one-offs, core operating trends remain intact.

Federal Bank (FB) reported 4QFY26 PAT of INR12.6b (up 22% YoY/21% QoQ, 16% beat), led by healthy NII and tax reversal of INR1.15b.

NII (Net Interest Income) rose 5.6% YoY to Rs.7,485cr, while NIM (Net Inter- PAT grew 9.0% YoY to Rs.1,041cr, supported by the highest ever Net Interest Income and operating profit. Despite a 125 bps rate cut, the bank displayed...

We recommend a BUY with a target price of Rs 290/share, implying an upside of 10% from the CMP.

Federal Bank reported a healthy Q3 FY26 performance, with advances up ~11% YoY and deposits up ~12% YoY, driven by strong CASA accretion (~19% YoY), strengthening the liability franchise. NIM expanded to 3.18% on liability optimisation and an improving asset mix, supporting healthy profitability with PAT up ~9% YoY and RoA at 1.15%. Asset quality remained strong, with GNPA at 1.72% and NNPA at 0.42%, supported by controlled slippages. Management guided for ~16% loan growth in FY27E and reiterated that margin and profitability gains are structural, driven by CASA mix improvement and lower...

We maintain our BUY recommendation on the stock.

Strong quarter with visible RoA expansion in medium term Q3FY26 performance: Federal Bank reported a strong performance in Q3FY26, driven by sustained margin expansion, robust fee income growth and improving asset quality. NIM expanded 12 bps QoQ to 3.18%, supported by lower funding cost, strong CASA accretion and continued shift towards mid-yield segments. Advances grew 10.9% YoY (4.5% QoQ) to 2,55,569 crore, led by commercial banking, business banking and gold loans, while deposits rose 11.8% YoY (3.1% QoQ) to 2,97,796 crore, with CASA ratio improving 106 bps QoQ to 32.07%. Credit...

PAT marginally beat estimates, driven by improvement in NIMs and lower CC; asset quality improved

Federal Bank (FB) reported 3QFY26 PAT of INR10.4b (up 9% YoY/QoQ, 7% beat), led by healthy NIMs (up 12bp QoQ, vs. our estimate of 3bp decline).

Key Development: Federal Bank Board has approved the preferential issuance of up to 27.3 crore warrants to Blackstone affiliate Asia II Topco XIII Pte. Ltd., raising 6,197 crore. Each warrant, priced at 227, is convertible into one equity share with a face value of 2 and a premium of 225. Upon full conversion, the investor will hold a 9.99% stake and gain the right to nominate one non-executive director to the bank's board. The warrants have an 18-month exercise period, with 25% payment due at subscription and the remaining 75% at conversion. The proposal is...

We maintain our BUY recommendation on the stock.

Federal Bank (FB) has approved up to 9.9% stake dilution to a Blackstone managed fund (fund) via preferential issues of warrants. The transaction would boost pro forma CET 1 by ~280bps (over the next 18 months) and FY27E ABV may rise by ~4%.

Federal Bank’s pivot toward margin-accretive growth, strengthening its liability profile and improving fee intensity is now further bolstered by the proposed ~INR62b preferential capital infusion from Blackstone.

Quarterly Update Q2FY26