Federal Bank reports highest ever net profit at Rs 704 cr; stock surges

Federal Bank on October 14 reported a 53 percent year-on-year (YoY) rise in net profit at Rs 704 crore for the quarter ended September 2022. Net profit in the year-ago period stood at Rs 460 crore. Net interest income (NII) grew 19 percent YoY to Rs 1,761.83 crore.

The stock ended 4.6 percent higher today at Rs 130.75 on the National Stock Exchange (NSE). For the year, the share price has advanced almost 50 percent.

The bank’s asset quality improved sequentially with gross NPA (non-performing assets) at 2.46 percent as compared to 2.69 percent in the previous quarter. Net NPA and Net NPA as a percentage to Net Advances stood at Rs 1,262.35 crore and 0.78 percent, respectively, the company said.

Total advances increased 19.4 percent to Rs 1.64 lakh crore as of September 30, 2022.

“This has been our strongest quarter till date with very good growth across all key parameters. Strong business momentum has aided meaningful gains in market share. Credit costs are well controlled at 53 bps. We are encouraged by this and are working to ensure that the trend continues,” Shyam Srinivasan, managing director & CEO said.

Analysing the results, Gaurav Jani – Research Analyst, Prabhudas Lilladher said, “NII was a beat. Loan growth was as expected. However, provisions rose sharply QoQ due to an increase in provision coverage ratio.”

The brokerage firm has a Buy rating on the stock with a target price of Rs 135.

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