Many brokerages maintained their stock ratings and price targets after June’s quarterly results.
Federal Bank Limited shares were flat on July 14 after the company announced weak June 2023 quarterly results, with many brokerages maintaining their stock ratings and price targets. On the BSE, the shares were trading at 127 rupees, up 0.04% from the previous close at 10:50 am.
Brokers Pravdas Liladar, Kotak Institutional Equities, ICICI Securities, Yes Securities and Motilal Oswal Securities affirmed their buy ratings on the stock. Kotak has kept its price target at 160 rupees per share, while ICICI Securities and Yes Securities have kept their price targets at 155 rupees and 175 rupees per share. Pravda’s Liladder slightly raised its price target from 170 rupees to 175 rupees per share. keep reading
Deutsche Bundesbank AG reported a 5.41% decline in net income for the quarter ended June primarily due to an increase in provisions compared to the prior quarter. The private financier’s net profit was 854 million rupees compared to 930 million rupees in the previous quarter, according to stock exchange filings. However, on an annual basis, net income he increased by 42%.
As of June 30, the lender’s net interest margin fell to 3.15% from 3.31% in the previous quarter. In addition, the lender’s asset quality also deteriorated, reflecting a slight rise in his total non-performing asset ratio to 2.38%. Meanwhile, the net non-performing asset ratio remained flat at 0.69%. Provisions also increased significantly, rising 33.4% quarter-on-quarter to Rs 155.6 million.
“We continue to be surprised by the negative investor reaction to banks’ NIM developments and should recognize that: (a) the current interest rate cycle is not what we have seen in the past; B. Loan books are far more sensitive to policy rates than deposits. Re-evaluation of proposals and lookups makes NIM unstable. (b) There was also the challenge of a prolonged wedge between lending and deposit growth, hurting banks that are much more dependent on term deposits. (c) Finally, we are entering an era of lower borrowing costs and less diversification, which will further increase competition. “All of this means more pressure and, importantly, more volatility in NIM,” Kotak said in his recent statement. The financier’s total loans increased by a staggering 21% year-on-year to reach Rs 1.83 lakh while its retail book portfolio increased by 17% year-on-year. In addition, total deposits of lenders increased by 21% to Rs 2.22 lakh. 。
During the quarter, the total difference for the previous quarter increased slightly to Rs.500 million compared to Rs.450 million in the previous quarter. In the retail sector, slippage increased from 1.4 percent to 1.67 percent in the last two quarters, and further increased to 1.92 percent in the first quarter of fiscal 2024. This is mainly due to book restructuring. The recovery was relatively weak with net loss increasing to INR 255 million (56 basis points) compared to INR 55 million (13 basis points) in the previous quarter. As a result, total non-performing assets (NPA) rose 6% quarter-on-quarter, supported by minimal write-downs, the lender said in its earnings call.
“FB reported mixed results in the first quarter of 2024 due to an increase in net income and the failure of his NII. The profit increase is due to the increase in other income and the NII shortfall is due to margin compression. However, business growth was healthy driven by momentum across all segments. The asset quality ratio remained stable, but with slightly greater deviations. “We are broadly sticking to our forecasts as controlled borrowing costs and solid other income offset a slight slowdown in NII growth,” Motilal Oswal Securities said in an investor note.
