Federal Bank |
On the right track |
ACCUMULATE
CMP: Rs 384 Target Price: Rs 425
n FB Q2FY12 NII came inline with expectation at Rs4.7bn, however net profit at Rs1.9bn was above expectation led by lower provisioning inline with improvement in asset quality
n NII grew by 8.2%yoy to Rs4.7bn led by 21.6% yoy (5.1% qoq) growth in loan book, albeit NIM’s contracted by 10bps qoq to 3.4%
n Slippages down from Rs3.2bn in Q1FY12 to 2.6bn in Q2FY12. Further aided by higher recovery/ upgradation (63% of NPA), GNPA ratio improved from 3.9% in Q1FY12 to 3.6% in Q2FY12
n Improvement in asset quality and pick up in balance sheet growth vindicates our view on the bank. Maintain ACCUMULATE with TP of Rs425
Regards,
Pradeep Agrawal |
Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : pradeep...@emkayglobal.com |
Board No. : +91-22-66121212 | Extn. : 340 | DID : 66121340 | Mob : +919833780355 | |
Kashyap Jhaveri |
Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : kashyap...@emkayglobal.com |
Board No. : +91-22-6612 1212 | Extn. : 249 | DID : +91-22-6612 1249 | Mob : +91-98202 41712 | Fax : +91-22-6624 2410 | |
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