Federal Bank shares fall 7% post Q3 profit decline
The Federal Bank stock fell nearly 7 per cent on recording a 5 per cent decline in net profit to ₹955 crore in the third quarter ended December 2024, as against a net profit of ₹1,007 crore in the year-ago period.
Brokerages believe that the increased provisions led to earnings miss. Domestic brokerage Motilal Oswal stated that the bank’s Q3 profit after tax stood 7 per cent below its estimate due to increased provisions.
While the bank’s net interest income (NII) grew 15 per cent on-year to ₹2,431 crore, the net interest margin was largely flat at 3.11 per cent in Q3.
On the asset quality front, slippages increased 14.7 per cent q-o-q.
Global brokerage UBS, maintaining buy call, has slashed the target price to ₹235 (from ₹250 earlier) on the stock. The brokerage has cut the loan growth estimates by 200-300 bps, NIM estimates by 2-8 bps, while it increased the credit cost estimates by 5 bps.
JP Morgan has maintained buy call on The Federal Bank at a target price of ₹215.
Shares of The Federal Bank declined 6.8 per cent to hit a low of ₹178.09 on the NSE. The stock traded at ₹184.30, down by 3.58 per cent as at ₹12.29 pm.
