FEDERALBNK - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.0

📊 Core Financials Overview

Profitability

ROE: 13.0% — solid for a mid-tier bank

ROCE: 6.95% — modest, typical for financial institutions

EPS: ₹15.9 — healthy earnings base

PAT Qtr: ₹862 Cr vs ₹1,030 Cr — 14.6% decline, likely due to higher provisions

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Balance Sheet Strength

Debt-to-Equity: 9.20 — expectedly high for banks due to deposit liabilities

Book Value: ₹136 — P/B ~1.45, reasonable for the sector

Dividend Yield: 0.60% — modest but consistent

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 12.5 In line with industry average (12.6) — fair valuation

PEG Ratio 0.43 Attractive — suggests undervaluation relative to growth

Intrinsic Value ~₹210–₹220 CMP slightly below fair value zone

Valuation is compelling, especially with a low PEG and fair P/E.

🏦 Business Model & Competitive Edge

Sector: Private banking — stable and regulated

Strengths

Strong presence in South India with expanding digital footprint

Diversified loan book with growing retail and SME segments

Institutional sentiment: FII holding up (+0.58%) despite DII trimming (-0.90%)

Challenges

Recent dip in quarterly profit due to higher provisions

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Asset quality and NIM trends need monitoring

📉 Technicals & Entry Zone

Current Price: ₹198

DMA 50: ₹199 | DMA 200: ₹196 — hovering near support

RSI: 55.5 — neutral zone

MACD: Slightly negative — momentum cooling

📌 Suggested Entry Zone: ₹185–₹195

A dip near ₹190 would offer a better margin of safety.

🧭 Long-Term Holding Guidance

Hold if invested: Strong fundamentals, fair valuation, and improving retail focus make it a solid long-term play.

Accumulate on dips: Ideal for conservative investors seeking steady growth and dividend income.

You can explore analyst forecasts and price targets on TradingView or review brokerage reports on Trendlyne for deeper insights

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. Let me know if you'd like a peer comparison with IDFC First or RBL Bank.

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stockanalysis.com

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in.tradingview.com

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trendlyne.com

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