Federal Bank
Federal Bank
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MidcapPrivate BankBanksTapetide Score
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Key Insights
Weaknesses
5- Company has low interest coverage ratio.
- Company has a low return on equity of 12.9% over last 3 years.
- Contingent liabilities of Rs.2,99,451 Cr.
- Company might be capitalizing the interest cost
- Dividend payout has been low at 7.14% of profits over last 3 years
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 2d agoFederal Bank Ltd trades at a market cap of ₹84,886 Cr with a P/E of 17.7x and P/B of 2.23x. The bank has delivered a strong 1-year stock CAGR of 76% and compounded profit growth of 24% over 10 years, but carries contingent liabilities of ₹2,99,451 Cr and a 3-year ROE of roughly 13%, which is modest for the sector.
- Strong long-term profit compounding at 24% CAGR over 10 years and 21% over 5 years, indicating sustained earnings momentum
- Exceptional 1-year stock CAGR of 76%, significantly outperforming broader market indices and most mid-cap banking peers
- Consistent 3-year and 5-year stock CAGR of 34% and 33% respectively, reflecting sustained investor confidence
- Compounded sales growth of 19% over 3 years and 16% over 5 years shows healthy topline expansion
- TTM profit growth of 16% continues to outpace TTM revenue growth of 7%, suggesting improving operating leverage and margin expansion
- P/E of 17.7x is reasonable for a private sector bank delivering double-digit profit growth, not excessively stretched
- 10-year compounded sales growth of 14% demonstrates a long track record of consistent revenue expansion across cycles
- Contingent liabilities stand at ₹2,99,451 Cr, which is roughly 3.5x the bank's market cap of ₹84,886 Cr — a material off-balance-sheet risk
- 3-year ROE of only 13% and last year ROE of 12% remain below the 15%+ levels seen at top-tier private banks
- Dividend payout has been just 7.14% of profits over the last 3 years, offering minimal income return to shareholders
- Dividend yield of only 0.35% is unattractive for income-oriented investors
- Low interest coverage ratio flagged as a concern, suggesting potential vulnerability to rising funding costs or asset quality stress
- TTM sales growth has decelerated sharply to 7% from the 3-year CAGR of 19%, signalling a potential revenue slowdown
- P/B of 2.23x is elevated relative to the bank's 12-13% ROE band — typically a P/B above 2x demands ROE closer to 15%+
- Possible capitalisation of interest costs could mean reported profitability overstates true operating performance
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 2h ago- Jana SFB integration risks Aug 26
Potential Jana SFB acquisition brings integration costs of ₹320-460 crore over 18-36 months, with Jana's GNPA at 2.24% vs Federal Bank's 1.52% and a concerning 6.7% unsecured GNPA. Citi flagged integration, valuation, and unsecured portfolio risks while maintaining a Neutral rating with ₹360 target.
- Jana promoter distress-driven deal Aug 25
Jana Holdings faces ₹4,200 crore debt overhang with ₹700 crore owed to TPG Asia that defaulted on June 30, 2026, forcing a stake sale under pressure. The six-month rollover deadline of December 31, 2026 creates urgency that may limit Federal Bank's negotiating leverage.
- Stock fell on acquisition reports Aug 26
Federal Bank shares fell 3.3% to ₹345.9 on initial acquisition reports and continued declining 0.5% the next session to ₹345.2, reflecting investor concerns about dilution and deal premium.
- 292% gain on Arcil IPO Sep 3
Federal Bank's ₹2.48 crore investment in Arcil is now worth ₹9.74 crore at the IPO upper band of ₹139/share, delivering a 292% return as the country's first ARC lists via a ₹733 crore IPO opening September 9.
- Jana SFB yield arbitrage opportunity Aug 26
Jana SFB's 7.5% NIM vs Federal Bank's 3.33% offers a 417 bps spread advantage, with refinancing Jana's high-yield assets at Federal Bank's lower 5.25% cost of funds potentially expanding NIM by 200-300 bps on the acquired portfolio.
- Blackstone ₹6,200 crore capital infusion Aug 25
Blackstone-managed funds are acquiring 9.99% stake via preferential warrants worth ~₹6,200 crore, with 25% received in FY26 and the remaining ₹4,200 crore likely converting to equity in FY28, supporting 14-16% growth plans.
- Strong 2026 stock performance Aug 26
Federal Bank stock has gained nearly 30% in 2026 versus a 6.9% decline in the Nifty 50, significantly outperforming the broader market.
- $500M bond raise approved Aug 18
Federal Bank board approved raising up to $500 million through foreign currency debt instruments via its IFSC Banking Unit at GIFT City, strengthening its capital position.
- 7.5% cashback credit card launch Sep 10
Federal Bank and Paisabazaar launched the Paisaback RuPay credit card at the Global Fintech Festival offering 7.5% grocery cashback capped at ₹1,000/month, with ₹500 annual fee waived on ₹1.5 lakh annual spend.
- Overseas investor meetings scheduled Sep 5
Federal Bank scheduled meetings with institutional investors and analysts outside India from September 9-11, 2026 under LODR regulations.
- Jana SFB stake acquisition structure Aug 25
Federal Bank is in advanced talks to acquire Jana Holdings' entire 16.9% stake in Jana SFB, followed by a mandatory open offer. Both banks issued standard clarifications stating they evaluate opportunities in ordinary course of business.
- 95th AGM completed Aug 21
Shareholders approved FY26 financials, final dividend, and re-appointment of MD & CEO Krishnan Venkat Subramanian at the August 21 AGM.
- Analyst engagement with HSBC Aug 20
Federal Bank held a one-on-one virtual analyst meeting with HSBC Securities on August 20, with no presentations made during the session.
TL;DR: Federal Bank is outperforming the market with 30% gains in 2026, backed by Blackstone's ₹6,200 crore capital infusion and solid strategic positioning including a 292% return on its Arcil investment. The key risk is the potential Jana SFB acquisition, which offers compelling NIM arbitrage but carries meaningful integration, asset quality, and execution risks tied to a distress-driven deal timeline. S&P notes sufficient capital buffers for near-term commitments, though the Jana deal would test management bandwidth. The trend is constructive if the bank secures favorable deal terms, but integration execution over the next 18-36 months will be the decisive factor.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 5,350 | 5,791 | 6,085 | 6,339 | 6,728 | 7,006 | 7,265 | 7,108 | 7,151 | 7,216 | 7,360 | 7,947 | 7,862 |
| Expenses | 1,634 | 1,661 | 1,814 | 1,917 | 2,048 | 2,149 | 2,349 | 2,265 | 2,506 | 2,519 | 2,595 | 3,017 | 2,665 |
| Financing Profit | 461 | 586 | 511 | 486 | 468 | 463 | 346 | 386 | 105 | 267 | 365 | 528 | 659 |
| Fin. Margin % | 9% | 10% | 8% | 8% | 7% | 7% | 5% | 5% | 1% | 4% | 5% | 7% | 8% |
| Other Income | 741 | 757 | 908 | 810 | 936 | 1,010 | 931 | 1,047 | 1,164 | 1,105 | 1,143 | 1,186 | 1,082 |
| Interest | 3,255 | 3,544 | 3,760 | 3,936 | 4,212 | 4,393 | 4,570 | 4,456 | 4,540 | 4,429 | 4,401 | 4,402 | 4,538 |
| Depreciation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| PBT | 1,202 | 1,343 | 1,420 | 1,296 | 1,404 | 1,473 | 1,277 | 1,434 | 1,270 | 1,373 | 1,507 | 1,714 | 1,741 |
| Tax % | 26% | 26% | 25% | 25% | 26% | 25% | 26% | 23% | 25% | 26% | 25% | 19% | 25% |
| Net Profit | 894 | 1,007 | 1,067 | 996 | 1,047 | 1,115 | 951 | 1,120 | 951 | 1,023 | 1,125 | 1,392 | 1,302 |
| EPS in Rs | 4.16 | 4.23 | 4.26 | 3.99 | 4.2 | 4.47 | 3.85 | 4.44 | 3.74 | 4.03 | 4.44 | 5.44 | 5.09 |
| Gross NPA % | 2.37% | 2.27% | 2.28% | 2.11% | — | — | — | — | — | — | — | — | — |
| Net NPA % | 0.74% | 0.68% | 0.68% | 0.63% | — | — | — | — | — | — | — | — | — |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 7,488 | 7,826 | 8,783 | 9,915 | 11,635 | 13,590 | 14,314 | 14,382 | 17,812 | 23,565 | 28,106 | 29,674 | 30,385 |
| Expenses | 1,701 | 2,529 | 2,749 | 3,331 | 3,572 | 4,608 | 5,527 | 5,758 | 5,828 | 6,792 | 8,523 | 10,332 | 10,796 |
| Financing Profit | 731 | 38 | 382 | 358 | 747 | 304 | 352 | 664 | 2,009 | 2,278 | 1,952 | 1,571 | 1,819 |
| Fin. Margin % | 10% | 0% | 4% | 4% | 6% | 2% | 2% | 5% | 11% | 10% | 7% | 5% | 6% |
| Other Income | 879 | 808 | 1,084 | 1,160 | 1,335 | 1,882 | 1,972 | 2,121 | 2,436 | 3,216 | 3,924 | 4,598 | 4,515 |
| Interest | 5,056 | 5,259 | 5,653 | 6,226 | 7,316 | 8,678 | 8,435 | 7,959 | 9,975 | 14,495 | 17,631 | 17,772 | 17,770 |
| Depreciation | 79 | 108 | 124 | 125 | 122 | 126 | 115 | 139 | 182 | 234 | 288 | 306 | 0 |
| PBT | 1,530 | 739 | 1,342 | 1,393 | 1,960 | 2,060 | 2,209 | 2,646 | 4,263 | 5,261 | 5,588 | 5,863 | 6,335 |
| Tax % | 34% | 34% | 36% | 35% | 35% | 25% | 25% | 26% | 26% | 25% | 25% | 24% | — |
| Net Profit | 1,058 | 486 | 867 | 935 | 1,318 | 1,590 | 1,680 | 1,996 | 3,210 | 3,964 | 4,234 | 4,491 | 4,843 |
| EPS in Rs | 6.17 | 2.83 | 5.03 | 4.74 | 6.63 | 7.93 | 8.34 | 9.37 | 14.95 | 15.93 | 16.93 | 17.63 | 19 |
| Div. Payout % | 18% | 25% | 18% | 21% | 21% | 0% | 8% | 19% | 7% | 8% | 7% | 7% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 171 | 344 | 345 | 394 | 397 | 399 | 399 | 421 | 423 | 487 | 491 | 493 |
| Reserves | 7,529 | 7,720 | 8,607 | 11,880 | 13,101 | 14,424 | 16,105 | 18,835 | 21,699 | 29,618 | 34,047 | 39,550 |
| Borrowing | 2,393 | 5,236 | 6,345 | 12,329 | 8,706 | 12,528 | 12,271 | 19,587 | 25,862 | 25,160 | 32,596 | 33,193 |
| Deposits | 70,823 | 79,171 | 97,662 | 1,11,970 | 1,34,879 | 1,52,252 | 1,72,186 | 1,81,678 | 2,12,988 | 2,52,455 | 2,83,484 | 3,13,491 |
| Other Liabilities | 1,993 | 2,234 | 2,527 | 2,640 | 3,469 | 3,751 | 4,006 | 5,721 | 7,031 | 10,119 | 9,534 | 15,354 |
| Total Liabilities | 82,909 | 94,706 | 1,15,486 | 1,39,214 | 1,60,552 | 1,83,353 | 2,04,967 | 2,26,241 | 2,68,004 | 3,17,839 | 3,60,152 | 4,02,081 |
| Fixed Assets | 446 | 508 | 477 | 452 | 462 | 477 | 504 | 643 | 890 | 996 | 1,456 | 1,420 |
| CWIP | 27 | 16 | 15 | 10 | 18 | 28 | 13 | 29 | 81 | 67 | 72 | 108 |
| Investments | 20,349 | 24,920 | 27,912 | 30,595 | 31,676 | 35,715 | 36,732 | 39,065 | 48,702 | 61,043 | 66,058 | 76,471 |
| Other Assets | 62,087 | 69,262 | 87,081 | 1,08,158 | 1,28,397 | 1,47,133 | 1,67,717 | 1,86,504 | 2,18,330 | 2,55,733 | 2,92,567 | 3,24,081 |
| Total Assets | 82,909 | 94,706 | 1,15,486 | 1,39,214 | 1,60,552 | 1,83,353 | 2,04,967 | 2,26,241 | 2,68,004 | 3,17,839 | 3,60,152 | 4,02,081 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 5,158 | -1,557 | 3,431 | -5,051 | 7,873 | 3,731 | 11,179 | -7,774 | 489 | 6,431 | 8,801 | 4,349 |
| Investing | -1,364 | 1,990 | -2,384 | -1,579 | -3,378 | -4,688 | -3,913 | 901 | -9,860 | -8,912 | -3,799 | -11,118 |
| Financing | -3,544 | 205 | 985 | 8,371 | -3,637 | 3,661 | -208 | 8,193 | 6,038 | 3,871 | 7,401 | 2,069 |
| Net Cash Flow | 250 | 639 | 2,032 | 1,741 | 858 | 2,704 | 7,058 | 1,320 | -3,332 | 1,390 | 12,403 | -4,700 |
| Free Cash Flow | 5,039 | -1,717 | 3,338 | -5,145 | 7,750 | 3,585 | 11,053 | -8,062 | 8 | 6,114 | 8,050 | 4,063 |
| CFO/OP | 100 | -29 | 64 | -66 | 107 | 49 | 134 | -80 | 14 | 46 | 52 | 29 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE % | 15% | 6% | 10% | 9% | 10% | 11% | 11% | 11% | 15% | 15% | 13% | 12% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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72 extracted metrics + investor summaries across FY10–FY27.
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Company Information
The Federal Bank Limited (‘the Bank’) was incorporated in 1931 as Travancore Federal Bank Limited. It provides retail and corporate banking, para banking activities such as debit card, third party product distribution etc., treasury and foreign exchange business.[1].It is the second-largest bank and the largest private sector bank in Kerala[2]
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