Rakesh Jhunjhunwala Portfolio Stock Zooms on Healthy Q1, Upto 29% Upside Pegged

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Rakesh Jhunjhunwala Portfolio Stock Zooms on Healthy Q1, Upto 29% Upside Pegged

By Malvika Gurung

Investing.com -- Shares of the private sector lender Federal Bank (NS: FED ) surged 4% to Rs 102.7 apiece at 12:50 pm on Monday, following healthy earnings results posted for the June 2022 quarter.

The lender kicked off the new financial year on a positive note, reporting a strong loan book growth, a fall in provisions on improved asset quality, healthier interest margin, a reduction in employee cost, and an improving RoA.

Federal Bank’s net profit jumped 63.5% YoY at Rs 600.6 crore, exceeding the Street’s estimates, led by a sharp fall in the sum allocated for bad loans, while NII climbed 13% YoY to Rs 1,604.5 crore in the quarter.

Its NIM rose 7 points YoY and 6 points QoQ to 3.22% in Q1, while gross and net NPAs fell too. Its total provisions more than halved to Rs 373 crore in the quarter as loan loss provisions narrowed.

Several brokerages are bullish on the stock post upbeat Q1 results, with Motilal Oswal (NS: MOFS ) and HDFC (NS: HDFC ) Securities seeing upsides of up to 29%, backed by strong loan growth, lower provisions, better margins and nil treasury losses. 

"The bank is steadily improving its return ratios and this would drive the next leg of re-rating," stated Kotak Institutional.

Ace investor Rakesh Jhunjhunwala holds 5.47 crore equity shares of the Kochi-based lender, accounting to a 2.64% stake, as of March 31, 2022.

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  • NikHil ThAkur @NikHil ThAkur
    this is the man behind taxes on cryptocurrency.
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  • NikHil ThAkur @NikHil ThAkur
    this is the man behind taxes on cryptocurrency.
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