Rakesh Jhunjhunwala’s portfolio stock Federal bank share price surged nearly 4 per cent to Rs 102.7 apiece on BSE on Monday. The jump comes after the lender posted a 63.5 per cent rise in standalone net profit at Rs 600.6 crore in April- June quarter of FY23, as compared to Rs 367 crore in the same quarter last year. At least three research and brokerage firms are bullish on the stock and see up to 32 per cent upside potential in the stock price
Stock talk: Should you buy, hold or sell Federal Bank shares?
Motilal Oswal: BuyTarget price: Rs 130; Upside: 32%
LKP Securities: BuyTarget price: Rs 124, Upside: 25%
LKP Securities also reiterated buy rating with increased target price of Rs 124 (based on 1.1x FY24E Adj. BVPS); a potential upside of 25 per cent. It believes that the asset quality is likely to stay stable with gradual improvement in profitability. “We have incorporated steady provision requirements along with stable growth in the balance sheet and thus expect it to deliver RoA/ RoE of 1.1%/13% by FY23E,” it added.
Sharekhan: BuyTarget price: Rs 120; Upside: 21.45%
Sharekhan has pinned a target price of Rs 120 apiece, with a buy rating to it. The research firm, in a note, said that At the CMP, the stock currently trades at 1.0x and 0.9x its FY2023E and FY2024E Core BV, which it believes is reasonable. “Factors such as better digital capabilities, sustaining healthy loan growth outlook, stable asset quality with higher-rated corporate book and continued focus to increase its retail mix with higher yielding businesses such as commercial vehicles, credit cards, and microcredit are expected to augur well for the bank’s growth going ahead. Low cost deposits mobilization would be key monitorable,” it said.
Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala jointly hold 2.10 crore equity shares or a 1.01 per cent stake in Federal Bank as per the March 2022 quarter shareholding pattern. While Rakesh Jhunjhunwala personally owns 5.47 crore Federal Bank shares or a 2.64 per cent stake in the bank. Therefore, collective holding in Federal Bank stood at 3.65 per cent stake.
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