Billionaire investor Rakesh Jhunjhunwala-backed private lender stock, Federal Bank, has a potential to grow around 37 per cent on the strong Q1 update. Brokerages like Motilal Oswal initiated a Buy rating, while Morgan Stanley gives Overweight on the stock with same a target of Rs 130 apiece.
The stock has been surging for the second straight session on Tuesday and it is up nearly 1 per cent intraday to Rs 95.75 per share on the BSE as against 0.86 per cent rise in the Sensex at 10:22 AM.
The bank in its Q1 update said that the gross advances grew around 16.3 per cent year-on-year (YoY) to around Rs 1.5 trillion. According to the internal classification of the bank, retail credit grew 16.7 per cent YoY while wholesale book posted a growth of 15.8 per cent YoY.
“Total deposit base grew 8.2 per cent YoY to Rs 1.83 trillion, total customer deposits rose 9.1 per cent YoY while CASA grew 15 per cent YoY, and growth in term deposit was 6.1 per cent YoY,” the bank said in its regulatory filing.
Overall, Federal Bank posted a healthy growth in advances, aided by strong system-level growth, Motilal Oswal said, adding that the deposits were largely flat on a sequential basis as there was stiff competition among the banks to garner the same. CASA trends remained stable with a marginal fall.
Morgan Stanely said gross loan growth strong sequentially, while loan to deposit ratio improves.
Ace investor Rakesh Jhunjhunwala, who is also called as the Big Bull of the Indian stock market, holds 75,721,060 equity shares, which translates into 3.7 per cent stakes in Federal Bank, as per the latest shareholding pattern of the company available on the BSE.
Rakesh Jhunjhunwala along with his wife Rekha and associates publicly holds 33 stocks with a net worth of over Rs 25,970.2 crore as of July 5, 2022, as per a stock analysis website trendlyne.com.