Buy Federal Bank, target of Rs 277: Motilal Oswal
Motilal Oswal has maintained its buy rating on Federal Bank with a price target of Rs 277 in its report dated May 25, 2009.
“Federal Bank’s 4QFY09 results were significantly below our expectations. NII growth was lower than we had estimated, tax rate was higher than we had expected. Strong tier-I ratio, higher provision coverage, and lower C/I ratio of 35% are the bank’s key strengths. We expect Federal Bank to report EPS of Rs 33 in FY10 and Rs 39 in FY11. We estimate 14% earnings CAGR over FY09-11. RoA should remain strong at1.4% over FY09-11. However, excess capital would restrict RoE at 13%. The stock trades 7.1x FY10E EPS and 0.9x FY10E BV of Rs 277. We have maintained buy rating on the stock, target of Rs 277,” says Motilal Oswal’s report.
source: Prakash Gaba
Tags: best buys, brokerage calls, brokerage tips, buy rating, buy stocks, federal bank, hot tips, Motilal Oswal
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