Federal Bank - Performance impacted by one off - Emkay

Reco: BUY
CMP: Rs 449
Target Price: Rs 600

- Federal Bank's (FB) Q4FY13 results inline with exp with adj NII/ PAT at Rs5.4bn/ Rs2.2bn. Interest reversal of Rs600mn and prov of 430mn on NAFED/ TN SEB impacted numbers

- Advance/ Deposit growth strong at 11%qoq. LDR remain stable at 76%. CASA ratio declined by 250bps to 26.5%. NIM's adjusted for interest reversal remain stable at 3.2%

- Asset quality deteriorates as slippages higher at Rs3.5bn. However with higher sell off to ARC and rec/ upgrades, GNPA remain stable at Rs15.5bn. PCR down by 464bps to 72%

- Expect 24%/22% CAGR in NII/PAT over FY13-15E. At CMP stock trades at attractive valuation of 1.1x FY14ABV and 1.0X FY15ABV. Upgrade to BUY with price target of Rs600.

Source : Equity Bulls

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