Stock alert! Strong Q4 performance makes Morgan Stanley and CITI bullish on Federal Bank – Check target price

On the back of strong quarter four results, the brokerage firms are bullish on the private lender Federal Bank, maintaining a Buy stance on the shares of the company. The company reported a 59 per cent rise in the net profit to Rs 478 crore in the March-ended quarter of the financial year 2020-2021.

The bank named V Venkateswaran as the Chief Financial Officer: PTI

On the back of strong quarter four results, the brokerage firms are bullish on the private lender Federal Bank, maintaining a Buy stance on the shares of the company. The company reported a 59 per cent rise in the net profit to Rs 478 crore in the March-ended quarter of the financial year 2020-2021.

The bank's net interest income (NII) stood at ₹1,420.4 crore, up 16.8 per cent YoY in Q4, while asset quality deteriorated as gross non-performing assets (NPA) came at 3.41 per cent QoQ basis.

Citi has a Buy rating on Federal Bank. It believes, low cost of funds and a steady rise in yields should lead to NIM (net interest margin) improvement. The brokerage firm says, the loan growth improved and slippages declines, however, the second wave of covid could lead to some uncertainties in the near term.

TRENDING NOW

Citi sets a target of Rs 100 per share. The stock is trading over 3.5 per cent higher to Rs 84.5 per share during Tuesday’s trade intraday.

Meanwhile, Morgan Stanley maintained an Overweight call on Federal Bank with an expectation of over one per cent RoA (return on assets) by FY23. It sets a target of Rs 110 apiece. The brokerage firm says the bank has posted good all-round performance amid higher loan growth, steady margin.

'The Bank’s capital and liquidity position is strong and would continue to be the focus area for the Bank during this period,'' it said in the exchange filing.

The bank, in a separate filing, announced the appointment of Venkatraman Venkateswaran as the Chief Financial Officer (CFO) with effect from Tuesday, May 18, 2021.

On account of uncertainties arising from the COVID-19 pandemic across India, Federal Bank says the bank will have an impact on operations and the financial position will depend on various aspects including actions are taken to mitigate its impact and other regulatory measures.

TAGS:

Federal Bank