Ambit Capital and other Institutional Investors as well are Bullish on the prospects of Federal Bank.
Federal Bank’s (FB) re-engineering of its credit appraisal process has resulted in a substantial improvement in its SME and retail asset
quality over the past few quarters. However, the potential re-rating has been subjected to investor skepticism around: (a) exposure to
stressed borrowers from its legacy large corporate book; and (b) spiraling operating costs from its ongoing branch expansion.
On a EPS Expectation of Rs 53 for FY 13 and Rs 65 for FY 14, one can BUY and hold for a price target of Rs 600. Valuations will be Reasonable even the target price.
