Shares of private sector lender Federal Bank crossed the Rs 200 mark for the first time ever on Tuesday. The Jhunjhunwala stock hit its record high of Rs 203.40, rising 5.58% in early trade amid a rally in broader market ahead of Union Budget 2024 speech. The banking stock rose after RBI approved the appointment of Krishnan Venkat Subramanian as the Managing Director & Chief Executive Officer of the lender.
The Jhunjhunwala stock had closed above Rs 190 level in the last seven sessions. The stock of the Kerela-based lender was trading at Rs 198.90 at 9: 26 am in early deals.
Rekha Rakesh Jhunjhunwala, wife of late investor Rakesh Jhunjhunwala, owned 3.83 crore shares or 1.59 per cent stake in the private lender at the end of March 2024 quarter. Shareholding data showed around 1.02% stake or 2.45 crore shares in the name of late Rakesh Jhunjhunwala in Q4 of last fiscal.
The market cap of the lender stood at Rs 48,786 crore. The banking stock has a one-year beta of 0.9, indicating low volatility during the period.
Total 4.34 lakh shares of the bank changed hands amounting to turnover of Rs 8.66 crore on BSE.
In terms of technicals, the relative strength index (RSI) of the stock stands at 67.1, signaling 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.
Global brokerage UBS is bullish on the banking stock. It has assigned a price target of Rs 250 on the stock from Rs 180 on a favourable risk-reward. 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, Anand Rathi Shares and Stock Brokers said, "Support will be at Rs 193 and resistance at Rs 197. A decisive close above the Rs 197 level may trigger a further upside to Rs 203 . The expected trading range will be between Rs 185 and Rs 208 in the short term."
Rahul Ghose, CEO of Hedged.In said, "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."
Federal Bank said its profit in the March quarter rose 0.4 per cent year-on-year (YoY) at Rs 906 crore compared with Rs 903 crore in the same quarter last year. Net Interest Income (NII) for the quarter rose 14.97 per cent YoY to Rs 2,195 crore from Rs 909 crore YoY.
Fee income climbed 14 per cent at Rs 620 crore. The Federal Bank board recommended a final dividend of Rs 1.20 per equity share of the face value Rs 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.