Jhunjhunwala stock hits record high for second time in four days but misses Rs 200 price target

Shares of private sector lender Federal Bank hit their record high in early deals on Thursday amid high volatility in the broader market. The Jhunjhunwala stock is hovering above the Rs 193 mark for the fifth straight session. However, it is yet to touch the crucial Rs 200 mark on an intra day basis. In the current trading session, the stock touched a record high of Rs 197.80 on BSE.

The stock of the Kerela-based lender rose 1.25% intra day in the current session against the previous close of Rs 195.35 on BSE. This is for the second time the stock hit record high in four sessions. On July 12, the stock rose to an all-time high of Rs 197.20.

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 Rs 48,247.64 crore. The banking stock has a one-year beta of 0.9, indicating low volatility during the period.

Total 1.61 lakh shares of the bank changed hands amounting to turnover of Rs 3.17 crore on BSE.

In terms of technicals, the relative strength index (RSI) of the stock stands at 77.9, signaling the stock is trading in the oversold 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  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. The brokerage 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 which is another 10% from here."

Mandar Bhojane, Equity Research Analyst, Choice Broking said, "Notably, the stock is trading above all major moving averages, highlighting its strength in the market. Considering these technical indicators and the prevailing market conditions, the current level of Rs 195 presents a favourable buying opportunity for the lender. The trade's target is set at Rs 210 and Rs 220, with a recommended stop-loss at Rs 184 to manage potential risks."

In the March quarter, the lender said its profit for the quarter was up 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.