Whenever you invest in any banking sector stock, you first look at the price analysis and check its share price by searching for terms such as UCO Bank share price, ICICI Bank share price, and SBI Bank share price on the internet. In this article, you’ll get to know about one such share price performance, which is the Federal Bank share price.
Performance of the Federal Bank share price
Federal Bank is a private bank founded on 23rd April, 1931 in Nedumpuram, Kerala. It is listed on the NSE, BSE, and LSE. As of 31st December, 2022, the bank had around 1333 branches and 1896 ATMs in 25 states. Its total market capitalization as of 21st February, 2023 stands at ₹26,885 crores.
The Federal Bank share price has increased by 43 percent from the last year, and the current traded price as of 21st February, 2023 is ₹127.10. The bank has a buy rating from all the analysts because of the healthy business growth, steady asset quality, and improvement in RoA (return on assets) from the last year.
The management has highlighted some of the reasons for its growth in share price, which are as follows:
- The bank is expected to have higher credit growth and an increase in RoA of 1.25% in the FY 2023-24 and 1.35% by the FY 2024. The share price is expected to grow at 1.4x by FY25, with the target price ranging from ₹155 to ₹165 per share.
- The bank will have steady growth in margins of around 3.4% and a 10 basis point improvement in RoA by FY24.
- It is expected that the rise in loans and deposits will continue in FY24, along with the rise in commercial vehicles, construction equipment, micro loans, credit cards, and personal loans in the next 2 years.
Financial Performance of Federal Bank
- The financial indicators of the Federal Bank as of Q3 of FY 22-23 are as follows:
- As of December 31, 2022, there is a rise in the market share of advances and deposits of around 1.26% and 1.12%, respectively.
- The bank has a balanced loan mix ratio with retail and wholesale loans at a ratio of 54:46.
- To 1.71 lakh crores, advances and loans increased by 19.1% year on year (YoY) and 4.3% quarter on quarter (QoQ).
- The net profits are at an all time high level of ₹804 crores which is grown by 54% YoY.
- The operating profit is also at an all-time high of ₹1,274 crores and the ROE in Q3 FY23 grew by 15.91%.
- The deposits also rose by 14.8% YoY.
- The CASA (current account and savings account) growth stands at 7% YoY.
- The NII (net interest income) grew by 27.1% YoY and 11.1% QoQ.
- The NIM (net interest margin) rose by 19 basis points, and QoQ growth stands at 3.5%.
- The GNPA (gross non-performing assets) has steadily increased by 2.4%, while the restructured book has increased by 1.78%.
Conclusion
Federal Bank share price is expected to grow in the future and will fulfill its promise of delivering a higher return to its investors. As its net profits and net worth are rising and are at their highest ever levels, so are its share prices and other indicators.