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LORD JESUS CHRIST SAYS

The thief comes only to steal and kill and destroy; I have come that they may have life, and have it to the full. “I am the good shepherd. The good shepherd lays down his life for the sheep.

31 Dec 2018

SHARE MARKET-• Buy Federal Bank; target of Rs 121: LKP Research


LKP Research is bullish on Federal Bank has recommended buy rating on the stock with a target price of Rs 121 in its research report dated December 24, 2018.
28 Dec, 2018 15:59

93.25  

LKP Research's report on Federal Bank

Federal Bank has outgrown from the tag of old private sector bank by doing market share wins in businesses, acquiring customers rapidly, improvising processes & engagement levels with the clients, filling the service gaps, mending digital initiatives in line with private sector banks, building strong management bandwidth – to become at par with the other large private sector banks. However, this larger picture has been ignored in the chaos of NPA mess. Asset quality problems should also start to recede incrementally despite Kerala floods. In our view, once the dust settles on asset quality woes, the bank would get multiple re-rating. BUY with TP of 121, upside of 30%.

Outlook

The current valuations of the bank offer decent upside. Currently, the bank is trading at 1.6x FY19e and 1.4x FY20e ABV. We give a BUY rating on the stock with the TP of 121 (discounting its FY20E ABV by 1.8x times).


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