Big Bull Rakesh Jhunjhunwala has increased his stake in Federal Bank by around 0.40 per cent in the second quarter (Q2) of the current financial year (FY22). During the April to June 2021 quarter, he added 7.5 million Federal Bank shares to his portfolio. For the past six months, the bank’s stock has remained in the Rs 70-Rs 90 range and has failed to deliver quality returns to its shareholders. This did not change the shareholding of Jhunjhunwala. After strong Q2FY22 numbers, their stock is reportedly experiencing “upside down momentum”.
Federal Bank, Indian private sector bank headquartered in Aluva, Kochi, Kerala. It has more than 1,250 branches in different states of India. At present, one share of the bank is trading at Rs 86.05. Federal Bank’s July 2021 shareholding pattern states that Jhunjhunwala holds 5,47,21,060 shares in the company. This is equivalent to 2.64 per cent stake in the private bank.
Stock market experts are of the view that Federal Bank share prices may rise in the coming days as it has recently reported strong trading momentum.
Jyoti Roy, DVP-Equity Strategist at Angel One Ltd, told Mint that Federal Bank has reported strong trading momentum for Q2FY22. It told the leading daily that Federal Bank’s advances registered a growth of 3.4 per cent (QoQ) at Rs 1,37,3091 crore. “Deposits have registered a growth of 2.5 per cent in QoQ to Rs 1,68,743 crore, while the CASA ratio has improved by 135 bps QoQ to 36.16 per cent,” he said.
He added that investors should also expect a gradual improvement in asset quality. Credit cost for the bank may also decline.
Sumeet Bagdia, Executive Director, Choice Broking has advised investors to buy shares of Federal Bank. He said that the share price of the bank can go up to Rs 94 per share in the short term.
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