LSE:FEDS

Stock Analysis Report

Executive Summary

The Federal Bank Limited engages in commercial banking activities in India.

Rewards

PE ratio (10.4x) is below the UK market (18.5x)

Earnings grew by 37% over the past year

Risk Analysis

No risks detected for FEDS from our risk checks.


Snowflake Analysis

Solid track record with adequate balance sheet.


Similar Companies

Share Price & News

How has Federal Bank's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FEDS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

FEDS

-3.6%

GB Banks

0.05%

GB Market


1 Year Return

-11.5%

FEDS

-6.0%

GB Banks

7.1%

GB Market

Return vs Industry: FEDS underperformed the UK Banks industry which returned -6% over the past year.

Return vs Market: FEDS underperformed the UK Market which returned 7.1% over the past year.


Shareholder returns

FEDSIndustryMarket
7 Day0%-3.6%0.05%
30 Day0%-3.6%-1.7%
90 Day-9.1%-2.3%4.1%
1 Year-10.5%-11.5%-1.2%-6.0%12.6%7.1%
3 Year-13.2%-16.0%-6.7%-17.4%18.4%3.6%
5 Year-55.5%-57.6%-2.6%-21.1%35.2%4.2%

Price Volatility Vs. Market

How volatile is Federal Bank's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Federal Bank undervalued compared to its fair value and its price relative to the market?

10.38x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: FEDS ($1) is trading above our estimate of fair value ($0.76)

Significantly Below Fair Value: FEDS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: FEDS is poor value based on its PE Ratio (10.4x) compared to the Banks industry average (9.2x).

PE vs Market: FEDS is good value based on its PE Ratio (10.4x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate FEDS's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: FEDS is overvalued based on its PB Ratio (1.2x) compared to the GB Banks industry average (0.6x).


Next Steps

Future Growth

How is Federal Bank forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

19.2%

Forecasted Banks industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Federal Bank has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Federal Bank performed over the past 5 years?

15.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FEDS has high quality earnings.

Growing Profit Margin: FEDS's current net profit margins (30.2%) are higher than last year (26.7%).


Past Earnings Growth Analysis

Earnings Trend: FEDS's earnings have grown by 15.4% per year over the past 5 years.

Accelerating Growth: FEDS's earnings growth over the past year (37%) exceeds its 5-year average (15.4% per year).

Earnings vs Industry: FEDS earnings growth over the past year (37%) exceeded the Banks industry 28.3%.


Return on Equity

High ROE: FEDS's Return on Equity (11.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Federal Bank's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: FEDS has a low level of unsold assets or inventory.

Debt Coverage by Assets: FEDS's debt is covered by short term assets (assets are 1.3x debt).


Financial Institutions Analysis

Asset Level: FEDS's level of assets compared to its equity is moderate.

Allowance for Bad Loans: Insufficient data to determine if FEDS has a sufficient allowance for bad loans.

Low Risk Liabilities: FEDS's liabilities are made up of primarily low risk sources of funding.

Loan Level: FEDS has an acceptable proportion of non-loan assets held.

Low Risk Deposits: FEDS's loans are broadly funded by customer deposits.

Level of Bad Loans: FEDS has a high level of bad loans (3.07%)


Next Steps

Dividend

What is Federal Bank's current dividend yield, its reliability and sustainability?

1.60%

Current Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.8%markettop25%5.1%industryaverage6.4%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: FEDS's dividend (1.6%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.79%).

High Dividend: FEDS's dividend (1.6%) is low compared to the top 25% of dividend payers in the UK market (5.09%).


Stability and Growth of Payments

Stable Dividend: FEDS's dividend payments have been volatile in the past 10 years.

Growing Dividend: FEDS's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (16.6%), FEDS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.3yrs

Average management tenure


CEO

Shyam Srinivasan (57yo)

9.4yrs

Tenure

₹159,227,192

Compensation

Mr. Shyam Srinivasan has been Managing Director, Chief Executive Officer and Director of Federal Bank Limited since September 2010. Mr. Srinivasan joined Bank after having worked with leading multinational ...


CEO Compensation Analysis

Compensation vs Market: Shyam's total compensation ($USD2.23M) is about average for companies of similar size in the UK market ($USD2.33M).

Compensation vs Earnings: Shyam's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Shyam Srinivasan
MD, CEO & Director9.4yrs₹159.23m0.41% 10.0m
Ashutosh Khajuria
Executive Director & CFO4.1yrs₹28.49m0.013% 308.2k
Shalini Warrier
COO, Business Head of Retail Banking Products & Additional Executive Director0.08yrsno datano data
N Rajanarayanan
Vice President of Marketing & Investor Relations0yrsno datano data
Samir Rajdev
Company Secretary & Compliance Officer0.2yrsno datano data
Anand Chugh
Head Marketing Department and Assistant General Manager0yrsno datano data
Ajith K. K.
Executive VP & Chief Human Resources Officer0.08yrsno data0.0020% 49.2k
Surendran Amittathody
Head of Retail Business and General Manager of RBD & IBD0yrsno datano data
C. Sasidharan
Zonal Head and General Manager5.8yrsno datano data
K. Sunny
Strategic Initiative & Optimization Head and Additional General Manager 0yrsno datano data

4.3yrs

Average Tenure

56yo

Average Age

Experienced Management: FEDS's management team is considered experienced (4.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Shyam Srinivasan
MD, CEO & Director9.4yrs₹159.23m0.41% 10.0m
Ashutosh Khajuria
Executive Director & CFO4.1yrs₹28.49m0.013% 308.2k
Shalini Warrier
COO, Business Head of Retail Banking Products & Additional Executive Director0.08yrsno datano data
Balakrishnan Krishnamurthy
Additional Non-Executive Independent Director1.4yrs₹690.00k0.0019% 46.5k
Grace Koshie
Director6.3yrs₹2.09mno data
Shubhalakshmi Panse
Independent Director5.7yrs₹2.18mno data
Manoj Fadnis
Additional Non-Executive Independent Director0.7yrsno datano data
Abhaya Hota
Non-Executive Independent Director2.1yrs₹1.69mno data
Siddhartha Sengupta
Additional Non-Executive Independent Director0.7yrsno datano data
Chandrasekhar Balagopal
Independent Director4.7yrs₹1.10mno data

3.1yrs

Average Tenure

59.5yo

Average Age

Experienced Board: FEDS's board of directors are considered experienced (3.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Federal Bank Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Federal Bank Limited
  • Ticker: FEDS
  • Exchange: LSE
  • Founded: 1931
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: ₹174.333b
  • Listing Market Cap: ₹2.436b
  • Shares outstanding: 1.99b
  • Website: https://www.federalbank.co.in

Number of Employees


Location

  • The Federal Bank Limited
  • Federal Towers
  • P O Box No.103
  • Aluva
  • Kerala
  • 683101
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
500469BSE (Mumbai Stock Exchange)YesEquity SharesININRFeb 1995
FEDERALBNKNSEI (National Stock Exchange of India)YesEquity SharesININRFeb 1995
FEDSLSE (London Stock Exchange)SPON GDR REG SGBUSDFeb 2006

Biography

The Federal Bank Limited engages in commercial banking activities in India. It operates through four segments: Treasury, Corporate/Wholesale Banking, Retail Banking, and Other Banking Operations. The company’s deposit products include savings accounts, current accounts, demat accounts, salary accounts, fixed deposits, cash certificates, recurring deposits, exchange earner’s foreign currency accounts, gilt accounts, and NRI deposit schemes. Its loan portfolio comprises gold, housing, car, property, educational or career, cash, instant digital, business, and agriculture and agricultural allied loans; travel, gift, debit, and credit cards; and loans against fixed deposits. The company also provides life, health, and general insurance products; mutual funds, online trading, and national pension system, as well as term loans, project finance, bill discounting, working capital loans, bank guarantees, letter of credit, packing credit limit, rediscounting of export bills, Internet banking, mobile banking, ATM, telephone banking services. As of March 31, 2019, it operated through a network of 1,251 branches and 1,669 ATMs. The company was formerly known as Travancore Federal Bank Limited and changed its name to The Federal Bank Limited in March 1947. The Federal Bank Limited was incorporated in 1931 and is headquartered in Aluva, India. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 21:18
End of Day Share Price2020/02/20 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.