Federal Bank: Gaining market share in good quality assets; Buy

LKP Research | Dec. 24, 2018, 11:09 a.m.

Valuation

In our view, once the dust settles on the asset quality woes, the bank would get multiple rerating on the back of balance-sheet strengthening, gaining market share, strong management team in place and higher asset growth. The current valuations of the bank offer decent upside. Currently, the bank is trading at 1.6x FY19e and 1.4x FY20e ABV. We give a BUY rating on the stock with the TP of Rs. 121 (discounting its FY20E ABV by 1.8x times).



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