2/5/2025, 12:46:02 pm

Buy Federal Bank; target of Rs 220: Sharekhan

Federal Bank's core operating profit fell 3% Q/Q due to weak NII and higher opex, but earnings exceeded estimates driven by lower credit costs from corporate loan recoveries. Loan growth was modest at 12% Y/Y, while deposits rose 6% Q/Q. The bank expects improved loan growth in FY26 and stable asset quality with credit costs at 40-45 bps. Sharekhan maintains a 'Buy' rating with target of Rs. 220.