Porinju Veliyath told the investors to stay away from stocks where there is large brokerage coverage and noise.
After Jefferies LLC, a global investment banking firm assigned a buy rating to the Federal Bank stock, Porinju Veliyath says that the the scrip is certainly overvalued at these levels. Federal Bank shares have soared more than 64% in the year so far. In the same period BSE Sensex has returned just 20%. The Federal Bank shares were trading flat at Rs 112.05 on Tuesday morning. In a conversation with ET Now Porinju Veliyath expressed that the Federal Bank shares have rallied by more than 140% in the last 1-2 year period. The ace investor told the investors to stay away from stocks where there is large brokerage coverage and noise.
The expert pointed out that when he spoke to the channel last year, Bombay Dyeing stock was trading at Rs 62 per share. He had told the investors to consider the stock back then. The scrip has rallied by more than 200% in the last one year. The shares were trading at Rs 138.80 up by more than 3% this morning.
Yesterday, Jefferies LLC had revised the target price for the Federal bank stock to Rs 140. Jefferies says that the Asset Quality improvement for the bank will drive returns going forward. For the quarter ended June-17, gross NPA for Federal Bank stood at ₹1,867.94 crore.The net NPA stood at ₹1,061.26 crore, and the net NPA percentage to net advances at 1.39 per cent.
Both gross and net NPAs in the quarter improved significantly to 2.42 per cent from 2.92 per cent in the first quarter of the last fiscal. Riding on the comfort of overall credit growth, the Kerala-based bank posted a 26 per cent surge in net profit at ₹ 210.15 crore in the first quarter of FY17.
The shares have seen a slight correction in the last one month, with the shares registering negative returns of 4% in the last one month. The shares are down by more than 5% in the last three month period.