FEDERALBNK - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.0

🏦 Core Financials & Profitability

Profit Growth: PAT increased from ₹944 Cr to ₹1,091 Cr — healthy 12.4% QoQ growth.

ROE (12.9%): Strong for banking sector — good return on shareholders’ equity.

ROCE (7.04%): Reasonable, considering interest-heavy nature of banking businesses.

EPS (₹16.9): Attractive — supports current price and valuation levels.

Debt-to-Equity (9.15): Standard for banks, as loans are assets; not a red flag here.

💰 Valuation Metrics

Metric Value Interpretation

P/E Ratio 12.1 Slightly undervalued vs industry PE (12.6)

P/B Ratio ~1.45 Reasonable premium over book value

PEG Ratio 0.43 Low — implies undervaluation relative to earnings growth

Intrinsic Value — Fair value likely around ₹215–₹225 range

✅ Valuation is attractive for accumulation, especially considering consistent profit delivery.

🧠 Business Model & Competitive Edge

Type: Mid-cap private sector bank.

Strengths

Well-established branch network.

Digital capabilities improving operational leverage.

Low NPAs (not provided, but assumed based on performance).

Risks

Competitive pressure from larger banks and fintech.

Slight institutional divergence

FII ↑ 0.58%

DII ↓ 0.90% — suggests short-term caution

📈 Technicals & Entry Zone

Current Price: ₹205

DMA 50/200: ₹208 / ₹197 — trading near key support zone

RSI (38.7): Approaching oversold territory — possible bounce

MACD (-0.26): Bearish signal — wait for momentum shift

Volume: Above average — strong investor activity

🛒 Suggested Entry Zone: ₹190–₹200 Accumulation near 200-DMA may offer good long-term entry with risk-managed upside.

📌 Long-Term View

Federal Bank has shown consistent earnings and offers upside potential with undervaluation and improving returns. Long-term outlook depends on

Loan book quality & NPA trends

Fee income growth & digital execution

Interest rate cycle & liquidity conditions

If you're hunting for a fundamentally sound private bank with moderate risk and steady growth, this one may be worth holding in your core portfolio.

Want to explore public sector bank comparisons or build a financial sector screener together? Happy to help plot your next move!

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