Federal Bank Q4 Results Review - Steady Quarter: Dolat Capital

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.Federal Bank Ltd. reported in-line net interest income growth at 15% YoY, with stable net interest margin at 3.2%. Operating profits (-17% YoY) were impacted by one-time wage hike related pension provisions of Rs 1.62 billion. However, negative credit costs driven by strong recoveries and reversal of standard provisions helped restore profitability, with return on asset at 1.2%. Management guided for RoA expansion by 4-5 bps in FY25. Even as we factor in lower net interest margin moderation relative to peers and operating leverage over FY25-26E, RoAs at 1.2% for FY25/26E remain lower versus FY24 owing to normalisation in credit costs (40-45 bps) and missing one-off treasury gains (Fedfina stake sale in FY24). Earnings for FY26E benefit from lower opex assumptions. We maintain “Accumulate” rating with target price of Rs 185 (from Rs 165), valuing the bank at 1.3 times FY26E price/adjusted book value against RoA/RoE of 1.2%/14%. While strong growth from high yielding segments has helped NIM, their seasoning and impact on credit costs remains a monitorable..Click on the attachment to read the full report:.Federal Bank Q4 Review - Earnings Inline; Asset Quality Improves: Motilal Oswal.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Federal Bank Q4 Results Review - Steady Quarter: Dolat Capital

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