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Buy Federal Bank; target of Rs 225: LKP Research

Published on 02/05/2025 09:00 AM

LKP Research's research report on Federal Bank

Federal Bank delivered an all-round performance, marked by sustained loan growth and improved profitability. The bank maintained a steady NIM despite lower yields in a falling interest rate environment, supported by strategic initiatives to garner high-quality deposits. Additionally, asset quality improved even in a challenging macro environment and is expected to remain strong, aided by surplus provisioning and tightened underwriting in the unsecured lending space. Under the new leadership, Federal Bank aims to position itself among the top private sector banks by enhancing return ratios through a focus on profitable expansion and optimal asset-liability management.

Outlook

Hence, with an optimistic outlook, we reiterate our BUY rating on the stock, based on 1.3x FY27E BVPS with a target price of ₹225.

For all recommendations report, click here

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Federal Bank - 02052025 - moti

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