FEDERALBNK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | FEDERALBNK | Market Cap | 70,726 Cr. | Current Price | 287 ₹ | High / Low | 302 ₹ |
| Stock P/E | 17.2 | Book Value | 157 ₹ | Dividend Yield | 0.42 % | ROCE | 6.27 % |
| ROE | 11.4 % | Face Value | 2.00 ₹ | DMA 50 | 281 ₹ | DMA 200 | 253 ₹ |
| Chg in FII Hold | 1.11 % | Chg in DII Hold | -0.71 % | PAT Qtr | 1,259 Cr. | PAT Prev Qtr | 1,041 Cr. |
| RSI | 52.0 | MACD | 3.78 | Volume | 1,42,09,297 | Avg Vol 1Wk | 1,17,39,936 |
| Low price | 183 ₹ | High price | 302 ₹ | PEG Ratio | 1.56 | Debt to equity | 8.66 |
| 52w Index | 87.4 % | Qtr Profit Var | 22.2 % | EPS | 16.7 ₹ | Industry PE | 15.0 |
Financials & Valuation:
FEDERALBNK shows moderate fundamentals. ROE (11.4%) and ROCE (6.27%) reflect average efficiency. EPS of 16.7 ₹ supports profitability, with quarterly PAT rising to 1,259 Cr. from 1,041 Cr., showing healthy growth. Debt-to-equity at 8.66 is high, typical for banks, but manageable within the sector.
Valuation Indicators:
P/E ratio of 17.2 is slightly above the industry average (15.0), suggesting fair-to-premium valuation. Book Value of 157 ₹ compared to current price of 287 ₹ shows moderate premium pricing. PEG ratio of 1.56 indicates reasonable valuation relative to growth. Dividend yield of 0.42% provides modest income support.
Business Model & Health:
FEDERALBNK, a private sector bank, benefits from strong retail and SME lending. Profitability momentum is positive, supported by rising PAT and EPS. FII holdings increased (+1.11%), showing foreign confidence, though DII holdings declined (-0.71%).
Entry Zone & Holding Guidance:
Technically, support lies around 275–285 ₹, with resistance near 295–300 ₹. Entry near support levels offers favorable risk-reward. Long-term holding is justified given steady profitability, though high leverage and modest efficiency metrics should be monitored.
Positive
- EPS of 16.7 ₹ with strong PAT growth.
- FII holdings increased (+1.11%).
- PEG ratio (1.56) indicates fair valuation.
- Price trading above 50 DMA and 200 DMA, showing bullish momentum.
Limitation
- High debt-to-equity (8.66), typical for banks but risky.
- ROCE (6.27%) and ROE (11.4%) are modest.
- Dividend yield remains low at 0.42%.
- P/E ratio slightly above industry average.
Company Negative News
- Decline in DII holdings (-0.71%).
- Efficiency metrics weaker compared to top peers.
Company Positive News
- Quarterly PAT surged to 1,259 Cr. from 1,041 Cr.
- FII holdings increased, reflecting foreign investor confidence.
- Strong retail and SME lending growth.
Industry
- Banking sector supported by credit growth and stable demand.
- Industry PE (15.0) is slightly lower than FEDERALBNK’s, suggesting fair valuation.
- Long-term growth driven by digital adoption and retail lending expansion.
Conclusion
FEDERALBNK is moderately strong with steady profitability, fair valuation, and sector support. Entry near 275–285 ₹ offers a favorable setup. Long-term investors can hold with confidence, while monitoring leverage and efficiency metrics.
Would you like me to extend this into a peer benchmarking overlay comparing FEDERALBNK against ICICI Bank, Axis Bank, and Kotak Mahindra Bank to highlight relative positioning in efficiency and valuation?