FEDERALBNK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | FEDERALBNK | Market Cap | 70,996 Cr. | Current Price | 288 ₹ | 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 | 284 ₹ | DMA 200 | 258 ₹ |
| Chg in FII Hold | 1.11 % | Chg in DII Hold | -0.71 % | PAT Qtr | 1,259 Cr. | PAT Prev Qtr | 1,041 Cr. |
| RSI | 50.9 | MACD | 0.13 | Volume | 74,01,884 | Avg Vol 1Wk | 73,64,147 |
| Low price | 185 ₹ | High price | 302 ₹ | PEG Ratio | 1.57 | Debt to equity | 8.66 |
| 52w Index | 88.0 % | Qtr Profit Var | 22.2 % | EPS | 16.7 ₹ | Industry PE | 14.4 |
📊 Financials: FEDERALBNK shows stable fundamentals. Quarterly PAT rose to 1,259 Cr from 1,041 Cr, reflecting healthy earnings growth. ROCE at 6.27% and ROE at 11.4% are moderate, indicating decent efficiency but room for improvement. EPS stands at 16.7 ₹, supporting profitability. Debt-to-equity is high at 8.66, typical for banks given their lending model, but manageable within the sector.
💰 Valuation: The stock trades at a P/E of 17.2, slightly above the industry average of 14.4, suggesting fair valuation. Book value is 157 ₹, with current price at 288 ₹, implying a P/B ratio of ~1.8. PEG ratio of 1.57 indicates valuation is moderately stretched relative to growth. Intrinsic value appears close to current levels, suggesting fair pricing.
🏦 Business Model & Health: FEDERALBNK operates as a private sector bank with strong retail and corporate lending presence. Competitive advantage lies in its regional strength, diversified loan book, and growing digital banking initiatives. Overall health is stable, supported by profitability and institutional interest, though return metrics remain modest compared to larger peers.
📈 Entry Zone: RSI at 50.9 indicates neutral momentum. Support is near 260 ₹, resistance at 302 ₹. Entry around 270–280 ₹ offers a favorable long-term opportunity. Long-term holding is attractive given consistent earnings growth and sector resilience.
Positive
- 🏦 [Earnings Growth](ca://s?q=FEDERALBNK_earnings_growth): PAT rose to 1,259 Cr from 1,041 Cr.
- 📈 [Valuation](ca://s?q=FEDERALBNK_valuation): P/E of 17.2 is close to industry average.
- 💸 [Institutional Support](ca://s?q=FEDERALBNK_institutional_support): FII holdings increased by 1.11%.
Limitation
- 📉 [Return Metrics](ca://s?q=FEDERALBNK_return_metrics): ROCE (6.27%) and ROE (11.4%) are modest.
- ⚠️ [Debt Levels](ca://s?q=FEDERALBNK_debt_levels): Debt-to-equity ratio of 8.66 is high, though typical for banks.
- 📊 [DII Outflow](ca://s?q=FEDERALBNK_DII_outflow): Domestic institutions reduced holdings by -0.71%.
Company Negative News
- 📉 [DII Reduction](ca://s?q=FEDERALBNK_DII_reduction): Decline in domestic institutional holdings.
- 📊 [Moderate Returns](ca://s?q=FEDERALBNK_moderate_returns): ROCE and ROE below top-tier peers.
Company Positive News
- 📈 [FII Inflow](ca://s?q=FEDERALBNK_FII_inflow): Foreign investors increased holdings by 1.11%.
- 💹 [Profit Growth](ca://s?q=FEDERALBNK_profit_growth): PAT improved quarter-on-quarter.
Industry
- 🏦 [Banking Growth](ca://s?q=Indian_banking_growth): Sector expanding with rising credit demand and digital adoption.
- 📊 [Industry PE](ca://s?q=Banking_industry_PE): Sector average P/E is 14.4, slightly below FEDERALBNK’s valuation.
Conclusion
✅ FEDERALBNK demonstrates stable fundamentals, consistent earnings growth, and strong institutional support, making it a fundamentally sound investment. While valuations are fair, return metrics remain modest. Entry around 270–280 ₹ is favorable, and long-term holding is recommended given the company’s resilience, digital initiatives, and sector outlook.