09 Jul , 2021 By : Kanchan Joshi
Private lender Federal Bank's share price has surged around 60% in one year and analysts at domestic brokerage house and research firm HDFC Securities see more upside in this Rakesh Jhunjhunwala portfolio stock.
HDFC Securities has a buy rating on the banking stock with target price of Rs95-104 per share with the time horizon of upto 3 Months and stop loss of Rs82.50, it said in a note on Tuesday.
The brokerage said volumes have confirmed the breakout on the daily charts and the stock has been finding support on its 50 days EMA. Indicators and oscillators have been showing strength in the current uptrend and the stock is placed above medium to long-term moving averages, indicating bullish trend on all time frames, it said. It added that banking as a sector has resumed its uptrend.
Domestic brokerage Angel Broking also has a ‘Buy’ stance on the stock with target price of Rs110 per share as it sees around 27% upside.
Explaining the rationale, Angel Broking said that Federal bank is one of India’s largest old generation private sector banks with total assets of Rs. 1.9 lakh crore. ''NPA’s have remained steady for the bank over the past few years with GNPA for Q3FY21 at 3.38% while NNPA ratio stood at 1.14%. PCR at the end of Q3FY21 stood at ~67% which we believe is adequate. Restructuring book is expected to be at Rs. 1,500-1,600 crore out of which Rs. 1,067 crore has already been restructured. This is against earlier expectations of total restructuring of Rs. 3,000-3,500 crore,'' it said.
According to the shareholding pattern of Federal Bank for March 2021 quarter, ace investor Rakesh Jhunjhunwala’s stake in the bank stood at 2.40% or 4,72,21,060 shares as of March quarter. He held the same stake in December 2020 quarter.
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