⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
FEDERALBNK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | FEDERALBNK | Market Cap | 70,044 Cr. | Current Price | 285 ₹ | High / Low | 290 ₹ |
| Stock P/E | 18.0 | Book Value | 142 ₹ | Dividend Yield | 0.42 % | ROCE | 6.95 % |
| ROE | 13.0 % | Face Value | 2.00 ₹ | DMA 50 | 262 ₹ | DMA 200 | 228 ₹ |
| Chg in FII Hold | -0.60 % | Chg in DII Hold | 1.39 % | PAT Qtr | 1,041 Cr. | PAT Prev Qtr | 955 Cr. |
| RSI | 64.3 | MACD | 7.44 | Volume | 34,09,378 | Avg Vol 1Wk | 95,14,255 |
| Low price | 173 ₹ | High price | 290 ₹ | PEG Ratio | 0.62 | Debt to equity | 8.75 |
| 52w Index | 96.2 % | Qtr Profit Var | 8.98 % | EPS | 15.8 ₹ | Industry PE | 15.8 |
📊 Core Financials
- Revenue growth: PAT at 1,041 Cr vs 955 Cr in previous quarter, showing 8.98 % improvement.
- Profit margins: EPS at 15.8 ₹, reflecting consistent profitability.
- Debt ratios: Debt-to-equity at 8.75, typical for banking sector but indicates high leverage.
- Cash flows: Strong, supported by stable earnings and robust loan book.
- Return metrics: ROCE 6.95 %, ROE 13.0 % — moderate efficiency, healthy shareholder returns.
💹 Valuation Indicators
- P/E ratio: 18.0, slightly above industry average (15.8), fairly valued.
- P/B ratio: Current Price / Book Value ≈ 2.0, reasonable relative to assets.
- PEG ratio: 0.62, attractive, suggests undervaluation relative to growth.
- Intrinsic value: Fairly valued, supported by consistent profitability and growth outlook.
🏢 Business Model & Competitive Advantage
- Operates as a private sector bank with strong retail and SME lending portfolio.
- Competitive advantage through regional dominance and diversified product offerings.
- Strong institutional support and improving profitability enhance resilience.
📈 Entry Zone & Long-Term Guidance
- Entry zone: Attractive near 260–275 ₹ levels, close to DMA 50 support.
- Long-term holding: Favorable due to consistent profitability, strong brand, and growth potential; suitable for investors seeking stable banking exposure.
Positive
- Quarterly PAT growth of 8.98 %.
- EPS at 15.8 ₹ reflects consistent earnings.
- DII holdings increased (+1.39 %).
- PEG ratio at 0.62 highlights undervaluation relative to growth.
Limitation
- ROCE at 6.95 % is modest compared to top peers.
- P/E ratio slightly above industry average.
- High debt-to-equity ratio (8.75), though typical for banks.
Company Negative News
- FII holdings decreased (-0.60 %).
- Technical indicators show caution: RSI at 64.3 (near overbought), MACD positive but momentum slowing.
Company Positive News
- Quarterly PAT improved (1,041 Cr vs 955 Cr).
- Strong institutional support from DII investors.
- Stock trading near 52-week high, reflecting investor confidence.
Industry
- Banking sector supported by credit growth, digital adoption, and stable interest rate environment.
- Industry PE at 15.8, close to Federal Bank’s P/E, suggesting fair valuation.
Conclusion
- Federal Bank demonstrates solid fundamentals with consistent profitability and strong institutional support.
- Valuation is fair compared to industry peers, with PEG ratio indicating growth potential.
- Entry advisable near support levels; long-term holding recommended for investors seeking stable banking exposure with moderate returns.
I can also prepare a comparative HTML snapshot against peers like ICICI Bank, Axis Bank, and Kotak Mahindra Bank to highlight Federal Bank’s relative valuation and strengths.