Rakesh Jhunjhunwala stocks: Based on attractive earnings trajectory, this Rakesh Jhunjhunwala stock can surge up to 36% in one year, as per brokerages. The bullishness on the counter comes after the Federal Bank posted a 64% jump in net profit Year-on-Year in the quarter ended June 2022. On the business front, gross advances grew 16.3% YoY and 4.6% QoQ to INR1.54t, led by a broad-based pick-up across segments. Its Corporate portfolio grew 6% QoQ, while the Retail, SME, and Agri each rose 4% QoQ.
Rakesh Jhunjhunwala stake in Federal Bank
Rakesh Jhunjhunwala holds 3.7% stake or 75,721,060 shares of Federal Bank in the quarter ended March’22. The shareholding pattern of the Federal Bank was yet to be updated by the exchanges for April-June quarter.
As per the latest corporate filings, the big bull of the Indian stock market holds 31 stocks in the quarter ended June 2022. The value of these stocks has been estimated over Rs 28,761.0 crore as on July 18, according to data with stock analysis platform trendlyne.com.
What brokerages say on Federal Bank Q1 FY23 results
Meanwhile, domestic brokerage house Prahudas Lilladher maintained a buy on Federal Bank with a a target price of Rs 135 per share, which comes at 36.3% return on the record price.
It was of the view that Federal Bank (FB) reported strong earnings yet again as core PPoP was a beat led by better loan growth and fee income, while opex was lower as rising interest rates resulted in lower pension provisions. Although net slippages were higher leading to more credit costs, core PAT was ahead of estimates, it underlined.
“Loan growth was solid yet broad based at ~17% YoY led by corporate and retail. FB is targeting a credit offtake higher than 15% in FY23E with focus on in BuB, CoB, gold, CC and CV/CE. Driven by increased credit flow to higher yielding segments and EBLR linked portfolio at 48%, NIM is expected to enhance. We remain optimistic on FB as earnings are expected to see a ~20% CAGR over FY22-24E while credit quality would remain resilient,” it said.
Business growth is gaining traction, while the liability franchise remains strong, with the Retail deposit mix ~94% and CASA ratio ~36.8%, says Motilal Oswal.
Headline asset quality ratio saw a marginal improvement, led by healthy recoveries and upgrades.
It marginally raised FY23/FY24 earnings estimate by 3%/4% and expects a RoA/RoE of 1.1%/13.6% in FY24. It maintained a buy with a TP Rs 130 per share.
As per LKP Securities, asset Quality remains in check, while strong growth across segments were reported in the recently concluded quarter.
“We believe the asset quality is likely to stay stable with gradual improvement in profitability. We have incorporated steady provision requirements along with stable growth in the balance sheet,” it said.
The brokerage reiterated a ‘buy’ with increased target price of Rs124, a potential upside of 25% on Friday’s closing.
Global Brokerage houses Morgan Stanley and CITI maintained an overweight rating and a buy call respectively. Morgan Stanley pegged the target price of Federal Bank at Rs 130 per share, while CITI sees a TO of Rs 120 apiece.
Federal Bank Share Price History
Meanwhile, shares of the Federal Bank closed with gains of over four per cent to Rs 103 per share on the BSE. The private bank counter has given a return of almost 18% in the past one year as on July 18. Federal Bank stock traded on 52-week high value of Rs 107.65 on October 25 last year, while the counter touched a year low of Rs 77.50 on August 27.