Federal Bank's Q4 FY25 earnings were in line with our estimates on the back of strong traction in fee income and lower credit costs, offset by lower growth on both sides of the balance sheet and relatively softer net interest income. Deposit growth (+12% YoY, -1% QoQ) was lower than expected, while the CASA ratio was stable at 30.2%, driven by healthy pick-up in current account balances.
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HDFC Securities Institutional Equities
Jindal Steel & Power - Volumes firm up and margin improves QoQ
We maintain Buy rating on Jindal Steel & Power Ltd. with an unchanged target price of Rs 1,050/share (6.5x its FY27E consolidated Ebitda). JSPL delivered 6% YoY volume growth, operating at 88% utilization in Q4 FY25. While NSR stood flat QoQ, it fell 8% YoY owing to weak steel pricing during the year.
Op-lev gain and lower iron-ore/coking coal prices cushioned the impact on margin which fell 4% YoY (recovered 2% QoQ) to Rs 11738 per mt. We believe volume growth will accelerate FY26 onwards as ongoing expansion ramp-up and recent uptick in steel prices. Subdued coal and iron ore prices should also support margin uptick.
Phoenix Mills - Asset revamp and premiumization drive underway
Phoenix Mills Ltd. reported a muted quarter, with revenue/Ebitda/adjusted profit after tax at Rs 10.2/5.6/2.7 billion, a (miss)/beat on our estimates by (5)/(7)/7%. Phoenix Mills saw 8% YoY like-for-like consumption growth on the back of healthy footfalls. Premiumization and revamp efforts at PMC malls in Bengaluru, Pune, and Mumbai are ongoing—impacting short-term consumption and rentals but expected to boost long-term yields.
Phoenix is targeting significant expansion with plans to add 7msf of retail space by FY30, including new malls and expansions at Palladium and Bengaluru. Phoenix is focusing on densification, with new-format stores set to open in Bengaluru and Pune within six-nine months. Phoenix plans to develop a retail mall in Thane c.1.3msf leasable area, where the project has secured approvals and shall launch by FY29.
Additionally, Phoenix has added 1.5mn sq. ft. FSI at Rs 5.9 billion (Rs 4,000/sq. ft.) premium in Lower Parel asset complex, which shall boost future rental income. Given revival in consumption, captive mall expansion, the addition of office space, a strong business development pipeline, and lower net debt, we maintain Buy with a target price of Rs 1,952/share.
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