100% gain in 2 years: Buy this private bank stock below Rs 100 and gain up to 35%

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Updated: April 16, 2018 4:40:07 PM

We bring to you a private bank share below Rs 100 which had doubled the investors' money in last two years to buy and gain up 35%.

Photo for representational purposes only. (Image: Reuters)

Indian stock markets are now all set to be steered ahead on the basis of ongoing earnings season for the quarter and the financial year ended 2017-2018 as about 49 Nifty companies are still left to announce their respective report cards in the upcoming days. In a broader term, Indian equities have grown relatively well after the downtrodden effects of the Chinese meltdown. During the last two years, the key equity indices Sensex and Nifty have risen about 33-34% while the banking sector benchmark Nifty Bank had logged a gain of 55% with blue-chip components growing more than 100% in the same period.

We bring to you a private bank share below Rs 100 which had doubled the investors’ money in last two years to buy and gain up 35%.

Shares of the Aluva-headquartered private sector lender The Federal Bank Ltd have more than doubled the investors’ wealth in the span of last two years only. The stock of The Federal Bank Ltd has surged 118% to Rs 98.65 in the last two years from a share price level of Rs 45.25 (18 April 2016) on NSE. The research and brokerage firm Motilal Oswal Securities Ltd had given a buy rating with a potential upside of 35% to a target price of Rs 124 from their recommendation price of Rs 92.

We expect The Federal Bank to report nearly 22% YoY (5% QoQ) loan growth, aided by renewed focus on corporate growth. The traction in SME (small and medium enterprise) and retail loans would be maintained with other income is likely growing at 4% YoY, Motilal Oswal Securities Ltd said in a report.

“We expect slippages to moderate during the quarter as the previous quarter had education loan waiver-related slippages of Rs 710 million. We expect PAT of Rs 2.8 billion v/s Rs 2.6 billion in 4QFY17 and ~Rs 2.6 billion in 3QFY18,” Motilal Oswal Securities added.

The Federal Bank Ltd commands a market capitalisation Rs 19,478 crore on the closing price of Rs 98.7 on BSE. The Federal Bank Ltd shares are categorised in the ‘A’ group shares on BSE and are a component of S&P BSE 100 and Nifty Bank indices.

Disclaimer: Views and recommendations given in this section are the brokerage firms’ own and do not represent those of www.financialexpress.com. Please consult your financial adviser before taking any position in the stock mentioned.

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