Views on Federal Bank 2QFY2016 Results : Angel Broking

Views of Mr. Vaibhav Agrawal (VP Research- Banking, Angel Broking) on Federal Bank 2QFY2016 Results:

"Federal Bank reported disappointing set of numbers as net profit declined 33% yoy to INR 161.3cr, below expectations. On the operating front, Net Interest Income for the bank increased marginally by 0.4% yoy, while non-interest income saw a decline of 6.9% yoy, leading to decline in the operating profit at INR 790.6cr as compared to INR 801.7cr a year ago. Operating expenses grew 15.9% yoy to INR 454cr. Also, provisions increased yoy from Rs. 45.7cr to INR 87.3cr. Net Interest Margins declined to 3.11% as compared to 3.12% for 1QFY2016 and 3.35% for 2QFY2015. On the asset quality front, the bank reported weak numbers, as its reported Gross NPA ratio grew to 2.90% in the current quarter as against 2.59% in 1QFY2016 and 2.10% in 2QFY2015. At the CMP, the stock is trading at 1.3x FY2016E ABV. We recommend NEUTRAL rating on the stock."

Shares of FEDERAL BANK LTD. was last trading in BSE at Rs.65.4 as compared to the previous close of Rs. 65. The total number of shares traded during the day was 227586 in over 1462 trades.

The stock hit an intraday high of Rs. 67 and intraday low of 64.6. The net turnover during the day was Rs. 14966388.

Source : Equity Bulls

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