Federal Bank share price today: Stock drops 4% after Q4 results – Time To Invest Now?

The shares of Federal Bank fell 4.2% to Rs 188.2 during Friday's intraday trade, despite the lender reporting a 13.7% year-on-year (YoY) increase in net profit to Rs 1,030.2 crore for the March quarter of FY25, as compared to Rs 906.3 crore in the previous fiscal.

The bank's net interest income (NII) rose 8.3% YoY to Rs 2,377.4 crore and the net interest margin (NIM) improved to 3.12%, on the back of strategic initiatives.

Additionally, the asset quality showed improvement, with gross NPAs falling to Rs 4,375.5 crore from Rs 4,553.3 crore in the previous quarter and net NPAs declining to Rs 1,040.4 crore from Rs 1,131.2 crore.

Further, the gross NPA ratio eased to 1.84% from 1.95% while the net NPA ratio improved to 0.44% from 0.49%.

The bank's provision coverage ratio, excluding technical write-offs, was at 75.37%.

What Do Brokerages Say?

Nomura: Nomura maintained a 'Buy' suggestion, though the target price has been lowered to Rs 220 from Rs 225. It also projected a soft NIM outlook in the near term and cut FY26-27 EPS estimates by 8-10% because of weaker NIMs and slower loan growth. The operating profit of the firm is likely to be impacted due to higher costs. Despite this, Nomura says that the asset quality is stable with healthy deposit growth.

Motilal Oswal: Motilal Oswal has also maintained its 'Buy' rating for the stock with a target of Rs 230, saying that the bank has a potential for sustained growth and improved profitability under its new leadership. It has also projected RoA and RoE to reach 1.25% and 14.0%, respectively, by FY27.

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