To buy Customized Research reports, please email: suhani.adilabadkar@gmail.com or call: 9701063320

Thursday, 26 October 2017


FEDERAL BANK LTD - Q2 FY18

FEDERAL BANK LTD reported strong & steady September quarter with PAT rebounding in double digits after de-growth in the previous June quarter. PAT stood at Rs. 2640 Mn compared to Rs. 2010 Mn same period previous year rising 31% YOY & 25% sequentially. Net Interest Income, difference between interest earned and expended was reported at Rs. 8990 Mn in the current quarter against Rs. 7260 Mn corresponding quarter previous year, expanding 24% YOY. Net Interest Margin was reported at 3.31% improving 18 B P QOQ with a fall of 1 basis point YOY in the current September quarter. Asset quality has also improved on yearly basis as GNPA & NNPA ratios declined 39 & 29 basis points in the current September quarter.  One basis point is 0.01%.  Gross NPAs as a percentage of Gross Advances was at 2.39% in Q2 FY18 against 2.78% same period previous year. Net NPAs as a percentage of Net Advances was reported at 1.32% in the current quarter against 1.61% same period previous year. Provisions & contingencies declined 25% sequentially and wwre reported at Rs. 1768 Mn vis-à-vis Rs. 1684 Mn in Q2 FY17. Wholesale or corporate segment reported 32% growth YOY leading the pack, followed by other banking business jumping 27% YOY. Retail grew 7% YOY and 2% sequentially whereas Treasury reported 3% rise on yearly basis with sequential negative growth of 8%. CASA ratio at 32.93% jumped 189 basis points YOY in September quarter. CASA deposits increased from Rs. 267870 Mn in Q2 FY17 to Rs 320160 Mn in the current September quarter, jump of 20% YOY. Other income or non interest revenue accounting 11% of the total income of the bank rose at 5% YOY at Rs. 2872 Mn against Rs 2721 Mn same period previous year. Advances moved at a higher rate of 25% whereas Deposits grew 13% YOY. Deposits stood at Rs. 972108 Mn with sequential growth of 1.43% whereas Advances rose 6% QOQ at Rs. 806459 Mn in Q2 FY18.  Cost income ratio of bank stood at 50.83% in the current quarter against 52.40% in the corresponding quarter previous year. Federal Bank with stable Net Interest Margin, growing NII and improving asset quality is marching towards sustainable growth for long term. We recommend BUY for medium and long term investment with a target price of Rs. 185.


Disclaimer                                       
                                      
The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment.

The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report.

The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected.

The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments.

We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever.

The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice.

This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk.


The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.



Name Of Research Analyst
Financial Exposure/Interest
Ownership
Suhani Adilabadkar
Nil
Nil
Relative
Owns Shares In the Company
Less than 1%

1 comment: