24 May , 2021 By : Kanchan Joshi
Banking and financial stocks continued to provide support to the equities on Monday, pushing the benchmark indices higher. Sensex surged above 50,000 mark while Nifty 50 was trading above 15,200 in the early deals. SBI, HDFC Bank, IDFC First Bank, Federal Bank, Canara Bank were some of the top gainers in the banking space.
Two bank stocks i.e., IDFC First Bank and Federal Bank are among top stock picks by stock broking firm Angel Broking for 24th May.
IDFC First Bank
The brokerage sees up to 34% upside in IDFC First Bank shares. Explaining the rationale, Angel Broking said, ''We believe efforts to built liability franchise, fresh capital infusion and provision taken on wholesale book will help to tide over this difficult time. The IDFC First Bank is trading ( 0.7 x FY22ABV) at a significant discount to historical average valuations.''
It has maintained the Buy stance on the stock with the target price of Rs77 per share.
Federal Bank
The brokerage said that Federal bank is one of India’s largest old generation private sector banks with total assets of Rs1.9 lakh crore. with deposits of Rs1.56 lakh crore and a loan book of Rs1.2 lakh crore in FY21.
''The bank's non-performing assets (NPAs) have remained steady over the past few years with Gross NPA for Q3FY21 at 3.38% while Net NPA ratio stood at 1.14%. Provision Coverage Ratio (PCR) at the end of Q3FY21 stood at ~67% which we believe is adequate. Restructuring book is expected to be at Rs1,500-1,600 crore out of which Rs1,067 crore has already been restructured. This is against earlier expectations of total restructuring of Rs3,000-3,500 crore,'' it said.
Angel Broking has maintained the Buy rating with the target price at Rs110 apiece, seeing an upside of around 29%
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