Rakesh Jhunjhunwala-backed banking stocks hit record highs after Q2 results | Techy Kings


Rakesh Jhunjhunwala-backed Federal Bank shares hit lifetime highs 132.20 on the NSE after the private lender reported strong Q2FY23 results on Friday. The stock price of Federal Bank opened at 127 each and further making the daily rate as low as 125.10 per share. However, after the announcement of the Q2 results, the share price of Federal Bank started to rise and went on to reach a record high within minutes of the announcement of the results.

According to stock market experts, Federal Bank shares are expected to remain in an upward trend after strong Q2 figures. They said in the short term, the share price of Federal Bank may rise to 145 while it is expected to rise to 184 each level in the long run. They advise Federal Bank shareholders to continue to hold Rakesh Jhunjhunwala’s banking shares for the stated target, depending on their time horizon.

Federal Bank share price target

Speaking on Federal Bank’s share price outlook, Ravi Singh, Vice President & Head of Research at Share India said, “Federal Bank posted better than expected Q2 results and its asset quality also showed improvement. The bank’s net interest margin also increased by 10 basis points YoY to 3.3 percent in the recently ended quarter due to strong business momentum, which has helped meaningful gains in market share. Federal Bank shares may rise further to level 138 in the near future. Investors can hold their long positions for better returns.”

Advising stock market investors to buy Federal Bank shares, Sumeet Bagadia, Executive Director at Choice Broking said, “Fresh investors with very short time horizons can buy Federal Bank at current levels for 135 target maintain stop loss at 124 a person.”

However, Manoj Dalmia, Founder & Director at Proficient Equities recommends stock market investors to buy and hold Federal Bank shares for the long term saying, “Federal Bank has formed a new high. It has reported a 53 percent rise in its standalone net profit for the quarter the second ended September 2022 and NII increased by 9 percent to 1,762 crore from 1,479.4 crore year-on-year. Investors can accumulate at current levels and can expect targets around 145 and a long-term target of 184. We can expect further income growth due to festive activities.”

Federal Bank Q2 Results

In the July to September 2022 quarter, Federal Bank reported a 53 percent increase in its standalone net profit for the second quarter ending September 2022. Its net profit increased to 703.7 crore vs 460.3 crore in the same quarter last year. The private lender showed an impressive reduction in its non-performing assets. The private bank’s net NPAs fell to 0.78 percent from 0.94 percent quarter-on-quarter (QoQ). Additionally, its gross NPAs declined to 2.46 percent, the lowest in 24 quarters.

Rakesh Jhunjhunwala’s shareholding in Federal Bank

According to Federal Bank’s shareholding pattern for the April to June quarter, Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala have invested in this private lender company. Rakesh Jhunjhunwala holds 5,47,21,060 shares or 2.63 per cent stake in an individual capacity while he and Rekha Jhunjhunwala together hold 2,10,00,000 shares or 1.01 per cent stake. So, both Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala together hold 4.63 percent stake in Federal Bank.

Disclaimer: The views and recommendations made above are the views of individual analysts or brokerage firms, and not of Mint.

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