Federal Bank Ltd. share price target

Maintain BUY with a TP of Rs 129 (2x FY19E ABV). After a heart-warming and broad based recovery over FY17, FBs 1QFY18 saw a minor blip in slippage (a one-off, in our view). This led to lower margins (despite sustained growth) and higher provisions (to keep PCR at 70%+). The quarter saw higher Corporate segment slippages (mostly relapse) and demonet/farm waiver impact on Retail and Agri segments. Encouragingly, SME slippages fell QoQ.

Federal Bank maintained steady business growth with healthy 28%YoY Loan growth and 18%YoY deposits growth in Q1FY18. PAT grew by 26% YoY, lower than our estimates largely due to higher NPA provisions which is not expected to persist. Asset quality outlook has further improved owing to reduction in large risk...

Federal Bank has witnessed a sharp decline in SMA-2 balance, which clearly suggests fresh slippage during 1QFY18 was more of a one-off event. Hence, we expect substantial improvement in the Bank's performance in remaining quarters of FY18. Notably, the Bank is gradually coming out of the scenario marked with higher provisioning and continued stress on asset quality for last few quarters. We expect the healthy traction in earnings to continue, going forward owing to robust growth in loan book, moderate credit cost and healthy margins. We reiterate our BUY...

ICICI Securities Ltd | Retail Equity Research Accretion in GNPA came in higher at | 425 crore (|280 crore in Q1FY17 & | 244 crore in Q4FY17), led by slippage in corporate segment. Absolute GNPA increased 8% QoQ to | 1868 crore, while GNPA ratio rose 9 bps QoQ at 2.42%. Standard restructured book (including SDR, S4A and 5/25) stood at | 1326 crore (1.7% of loans). Healthy PPP growth at 31% YoY led by traction in NII and other income. Higher slippages keep provision elevated at | 236 crore....

NII increased to Rs. 842.39 Cr in Q4FY17 compared to Rs. 791.39 Cr in Q3FY17. The value of NII has been increasing throughout the period.

We expect advance growth at 18% CAGR for FY17-19E led by growth in Corporate, SME and Retail portfolio. Going forward, managements focus would be on containing slippages from its corporate book, reduce its cost of borrowings and also increase lending towards retail and SME.

The bank's top-line performance was up as net interest income increased by 23% to Rs 842 crs compared to Rs 686 crs YoY & Rs 791 crs QoQ. Other income rose by 19% to Rs 282 crs YoY. C/I ratio for the bank dropped to 51.16% vs. 56.78% YoY and decreased sequentially by 381 bps. NIM expanded from 3.31% in corresponding...

ICICI Securities Ltd | Retail Equity Research Federal Bank posted strong numbers with PAT above our estimates NII came in at | 842 crore, in line with our estimate. This was mainly led by healthy credit offtake at 24.7% YoY to | 73336 crore. Margins improved 10 bps QoQ to 3.42% partly aided by higher low-cost deposits received during demonetisation Asset quality continues to improve with slippages at | 244 crore lowest in the last seven quarters. GNPA ratio declined to 2.33% from...

Federal Banks (FB) 4Q performance was robust on all fronts, with broad-based loan growth (26%) healthy fee growth (37%) and steady NIMs (3.4%). Opex ( 9%) was controlled despite one-offs. Oplev was visible, with a sharp 380bps QoQ drop in C-I ratio. With lower slippages and ARC sale, asset quality saw a sharp improvement.

Federal Bank has surprised the market for another successive quarter by delivering strong growth in operating profit and loan book in 4QFY17. Its operating profit grew by 39.2 YoY & 15.6% QoQ to Rs5.5bn led by 22.8% YoY & 6.4% QoQ growth in NII and 41% YoY & 21.5% QoQ growth in other income. Provisioning expenses saw 68.4% YoY and 22.7% QoQ decline led by steady decline in fresh slippages along with improvement in upgrades and recoveries. Consequently, its PAT grew by 24 times YoY and 24.8% QoQ to Rs2.6bn. The Bank showed greater resilience on asset quality front with its gross and net NPAs remaining within the Management's comfort zone. Fresh slippages stood at Rs2.4bn in 4QFY17 compared to Rs2.9bn in 3QFY17 and Rs5.4bn...