Axis Securities Reiterate "Buy" Recommendation On Midcap Banking Stock, Sees 27% Upside

Axis Securities has come up with a stock-to-buy idea from the banking sector, which is Federal bank, a leading private sector bank. The brokerage assigned a "Buy" on the stock with a target price of Rs 170 apiece. The stock purchased at the current market price would give a decent return of up to 27% considering its given target price by the brokerage. Federal Bank is a midcap banking stock having a market capitalisation is Rs 28,377.53 crore.

Stock Performance Over The Years

The stock on NSE last traded at Rs 134.20/share, up 0.64% as compared to its previous close of Rs 133.35 apiece. The stock's 52 week high is Rs 143.40 apiece and 52 week low is Rs 82.50 apiece, respectively. The stock gave 5.54% positive return in 1 week. It has given 0.6% positive return in 1 month and 0.71% in 3 months, respectively. It has given 40.16% positive return in 1 year, 58.82% in 3 years and 42.77% in 5 years, respectively.

Outlook

According to Axis Securities, "FB continues to progress well on most key operational metrics and remains well-poised to deliver a healthy RoA/RoE of 1.2-1.3%/14-15% over the medium term. This would be driven by i) Robust credit growth with an improving share of the high-yielding products, ii) Granular liability franchise with a higher share of retail-dominated deposits and healthy CASA Ratio, iii) Improving Fee Income profile, iv) Gradually moderating Opex, and v) Improving asset quality metrics. This would result in the bank's credit costs trends continuing to remain benign. FB remains our most preferred pick in the mid-sized private banks."

Valuation & Recommendation

Axis Securities said, "The stock currently trades at an attractive valuation of 1.1x Sep'24E ABV. We maintain our target multiple of 1.5x Sep'24E ABV to arrive at a target price of Rs 170/share, implying an upside of 32% from the CMP. We reiterate our BUY recommendation on the stock."

Disclaimer

The stock has been picked from the brokerage report of Axis Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.