Rakesh Jhunjhunwala portfolio stock: Analyst expects 25% growth in this mid-cap private bank share price; know triggers here

Billionaire investor Rakesh Jhunjhunwala-backed banking stock – Federal Bank has potential to surge around 25 per cent, a domestic brokerage firm Axis Securities said on the back of robust Q3 results

Rakesh Jhunjhunwala, who is also termed as the Big Bull of the Indian stock market, stayed put in December quarter. Source: PTI

Billionaire investor Rakesh Jhunjhunwala-backed banking stock – Federal Bank has potential to surge around 25 per cent, a domestic brokerage firm Axis Securities said on the back of robust Q3 results.

One of the favourite private bank stocks in the ace investor’s portfolio, Federal Bank on Thursday reported 29 per cent year-on-year growth in profit after tax to Rs 520 crore in December-end quarter of the financial year 2021-22 (Q3FY22).

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The added was mainly aided by ROA expansion to 1 per cent, the brokerage said in Q3 review.

During the quarter, the net interest income (NII) growth has marginally slowed down to 7.1 per cent to Rs 1540 crore despite the net interest margin (NIM) improvement, while the slippage ratio of 1.3 per cent remains manageable.

Similarly, the asset quality improved to as gross non-performing assets (NPA) stood at 3.06 per cent, down 18 basis points and net NPA at 1.05 per cent, down 7bps quarter-on-quarter (QoQ).

Rakesh Jhunjhunwala, who is also termed as the Big Bull of the Indian stock market, stayed put in December quarter, and has same number of shares that pf previous quarter – 75,721,060 equity shares, which aggregates to 3.7 per cent stakes in the company, as per latest shareholding pattern.

Axis Securities with Buy rating estimates a target of Rs 125 per share, with an upside of 25 per cent as compared to Friday’s close of Rs 100 per share. The counter in the last 5 days has surged almost 9 per cent as compared to 3 per cent fall in the S&P BSE Sensex.

“We believe the asset quality is likely to stay stable driving gradual growth in the earnings and expect steady provision requirements along with healthy growth in the balance sheet and NIMs to deliver RoA/ RoE of 1.1/14.9 per cent by FY23E,” Axis Securities said in its expectations on the stock.

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