Federal Bank shares cross 200 rupees

Federal Bank Shares Cross ₹200 Mark for the First Time Amidst Market Rally

Shares of private sector lender Federal Bank crossed the ₹200 mark for the first time ever on Tuesday. The stock hit its record high of ₹203.40, rising 5.58% in early trade amidst a broader market rally ahead of the Union Budget 2024 speech. This surge followed the Reserve Bank of India’s (RBI) approval of Krishnan Venkat Subramanian as the Managing Director & Chief Executive Officer of the lender.

Federal Bank‘s stock had consistently closed above the ₹190 level in the last seven sessions. At 9:26 am in early deals, the stock of the Kerala-based lender was trading at ₹198.90.

Key Shareholder Information

Rekha Rakesh Jhunjhunwala, wife of the late investor Rakesh Jhunjhunwala, owned 3.83 crore shares or a 1.59% stake in the private lender at the end of the March 2024 quarter. Shareholding data showed around a 1.02% stake or 2.45 crore shares in the name of late Rakesh Jhunjhunwala in Q4 of the last fiscal year.

The market cap of the lender stood at ₹48,786 crore. The banking stock has a one-year beta of 0.9, indicating low volatility during this period.

Trading Activity

A total of 4.34 lakh shares of the bank changed hands, amounting to a turnover of ₹8.66 crore on the BSE. In terms of technicals, the relative strength index (RSI) of the stock stands at 67.1, signaling that the stock is trading neither in the oversold nor in the overbought zone. Federal Bank shares are trading higher than the 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.

Analyst Opinions

Global brokerage UBS is bullish on the banking stock, assigning a price target of ₹250 from ₹180 based on a favorable risk-reward ratio. The brokerage has raised its rating to ‘Buy’ from ‘Neutral’ on the banking stock. UBS expects a return on assets (RoA) accretion-based re-rating, aided by near-term catalysts. Clarity on the new CEO and visibility on future strategy are among the re-rating catalysts.

Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, “Support will be at ₹193 and resistance at ₹197. A decisive close above the ₹197 level may trigger a further upside to ₹203. The expected trading range will be between ₹185 and ₹208 in the short term.”

Rahul Ghose, CEO of Hedged.In, commented, “The Federal Bank counter is seeing a stellar uptrend but in the near term seems to be overbought. There is a buy level around ₹190 and the ₹180 levels, which is the range where the stock should see the second round of rally starting from. The medium-term target for the stock can be ₹220.”

Financial Performance

Federal Bank reported a profit of ₹906 crore in the March quarter, a 0.4% increase year-on-year (YoY) compared with ₹903 crore in the same quarter last year.

Federal Bank shares cross 200 rupees. Net Interest Income (NII) for the quarter rose 14.97% YoY to ₹2,195 crore from ₹909 crore YoY. Fee income climbed 14% to ₹620 crore. The Federal Bank board recommended a final dividend of ₹1.20 per equity share of the face value of ₹2 each (60%) for the financial year 2023-24, subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the lender.

Conclusion

Federal Bank’s shares crossing the ₹200 mark for the first time marks a significant milestone, driven by positive market conditions and strategic leadership changes. The approval of Krishnan Venkat Subramanian as the new CEO, strong shareholder backing, and robust financial performance have contributed to this achievement.Federal Bank shares cross 200 rupees. The bank’s stock shows promising growth potential, supported by favorable analyst ratings and technical indicators. This milestone reflects the bank’s strong position and future growth prospects in the financial sector.

FAQS:

1. What recent milestone did Federal Bank’s stock achieve?

Federal Bank’s stock crossed the ₹200 mark for the first time ever, reaching a record high of ₹203.40. This surge occurred amidst a broader market rally ahead of the Union Budget 2024 speech and followed the Reserve Bank of India’s (RBI) approval of Krishnan Venkat Subramanian as the new Managing Director & Chief Executive Officer.

2. How has Federal Bank’s stock performed in the recent past?

Federal Bank’s stock had consistently closed above the ₹190 level in the last seven sessions. On the day of the record high, the stock was trading at ₹198.90 in early deals. The banking stock has a one-year beta of 0.9, indicating low volatility during this period and is trading higher than the 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.

3. Who are the significant shareholders of Federal Bank?

Rekha Rakesh Jhunjhunwala, wife of the late investor Rakesh Jhunjhunwala, owned 3.83 crore shares, or a 1.59% stake, in Federal Bank at the end of the March 2024 quarter. Additionally, shareholding data showed a 1.02% stake, or 2.45 crore shares, in the name of the late Rakesh Jhunjhunwala in Q4 of the last fiscal year.

4. What are the technical indicators and trading activity for Federal Bank’s stock?

On the trading day mentioned, a total of 4.34 lakh shares changed hands, amounting to a turnover of ₹8.66 crore on the BSE. The relative strength index (RSI) of the stock stands at 67.1, signaling that the stock is neither oversold nor overbought. Analysts have provided support and resistance levels, with Jigar S Patel noting support at ₹193 and resistance at ₹197, while Rahul Ghose mentioned buy levels around ₹190 and ₹180, with a medium-term target of ₹220.

5. How did Federal Bank perform financially in the recent quarter?

Federal Bank reported a profit of ₹906 crore in the March quarter, a 0.4% increase year-on-year (YoY) compared to ₹903 crore in the same quarter last year. Net Interest Income (NII) for the quarter rose by 14.97% YoY to ₹2,195 crore from ₹1,909 crore YoY. Fee income climbed 14% to ₹620 crore. Additionally, the Federal Bank board recommended a final dividend of ₹1.20 per equity share of the face value of ₹2 each (60%) for the financial year 2023-24, pending shareholder approval at the upcoming Annual General Meeting (AGM).