NSEI:FEDERALBNK

Stock Analysis Report

Executive Summary

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


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: FEDERALBNK has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.8%

FEDERALBNK

-0.9%

IN Banks

-0.3%

IN Market


1 Year Return

11.0%

FEDERALBNK

8.8%

IN Banks

9.9%

IN Market

Return vs Industry: FEDERALBNK exceeded the Indian Banks industry which returned 7.2% over the past year.

Return vs Market: FEDERALBNK exceeded the Indian Market which returned 8.2% over the past year.


Shareholder returns

FEDERALBNKIndustryMarket
7 Day4.8%-0.9%-0.3%
30 Day8.8%-1.8%3.5%
90 Day18.7%5.5%5.9%
1 Year12.5%11.0%9.2%8.8%11.9%9.9%
3 Year26.2%22.1%21.6%20.2%30.2%23.3%
5 Year43.6%35.4%8.1%4.6%37.1%24.8%

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

Valuation

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

11.39x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: FEDERALBNK (₹91.05) is trading above our estimate of fair value (₹52.36)

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


Price To Earnings Ratio

PE vs Industry: FEDERALBNK is good value based on its PE Ratio (11.6x) compared to the Banks industry average (22.3x).

PE vs Market: FEDERALBNK is good value based on its PE Ratio (11.6x) compared to the Indian market (13.8x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: FEDERALBNK is overvalued based on its PB Ratio (1.3x) compared to the IN Banks industry average (0.7x).


Next Steps

Future Growth

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

24.2%

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: FEDERALBNK has high quality earnings.

Growing Profit Margin: FEDERALBNK's current net profit margins (29.2%) are higher than last year (25.9%).


Past Earnings Growth Analysis

Earnings Trend: FEDERALBNK's earnings have grown by 14.6% per year over the past 5 years.

Accelerating Growth: FEDERALBNK's earnings growth over the past year (38.7%) exceeds its 5-year average (14.6% per year).

Earnings vs Industry: FEDERALBNK earnings growth over the past year (38.7%) exceeded the Banks industry 29.5%.


Return on Equity

High ROE: FEDERALBNK's Return on Equity (11.1%) 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: FEDERALBNK has a low level of unsold assets or inventory.

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


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

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

1.46%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%0.5%markettop25%2.3%industryaverage0.4%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: FEDERALBNK's dividend (1.54%) is higher than the bottom 25% of dividend payers in the Indian market (0.56%).

High Dividend: FEDERALBNK's dividend (1.54%) is low compared to the top 25% of dividend payers in the Indian market (2.31%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (17.8%), FEDERALBNK'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

What is the CEO of Federal Bank's salary, the management and board of directors tenure and is there insider trading?

4.3yrs

Average management tenure


CEO

Shyam Srinivasan (57yo)

9.3yrs

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 ($USD2.25M) is above average for companies of similar size in the Indian market ($USD749.06K).

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


Management Age and Tenure

4.3yrs

Average Tenure

56yo

Average Age

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


Board Age and Tenure

2.0yrs

Average Tenure

59.5yo

Average Age

Experienced Board: FEDERALBNK's board of directors are not considered experienced ( 2 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: FEDERALBNK insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Sell₹1,163,38031 Dec 19
Jose Mathew
EntityIndividual
Shares13,457
Max Price₹86.45
Sell₹467,00026 Sep 19
George Jacob
EntityIndividual
Shares5,000
Max Price₹93.40
Sell₹2,005,73425 Jul 19
Sumit Kakkar
EntityIndividual
Shares20,650
Max Price₹97.13
Sell₹1,954,90004 Jul 19
P. Panicker
EntityIndividual
Shares19,000
Max Price₹102.89
Sell₹1,207,49920 Jun 19
Sumit Kakkar
EntityIndividual
Shares11,500
Max Price₹105.00
Sell₹1,050,63912 Jun 19
Harish S
EntityIndividual
Shares10,000
Max Price₹105.06
Sell₹1,554,17412 Jun 19
Philip Abraham
EntityIndividual
Shares14,500
Max Price₹107.18
Sell₹2,679,73811 Jun 19
V. Nandakumar
EntityIndividual
Shares25,000
Max Price₹107.19
Sell₹625,95501 Jun 19
K. Baby
EntityIndividual
Shares5,990
Max Price₹104.50
Sell₹5,261,63530 May 19
Deepak Govind
EntityIndividual
Shares49,800
Max Price₹105.66
Sell₹1,045,08728 May 19
Shabnam Mechant
EntityIndividual
Shares10,000
Max Price₹104.51
Sell₹2,569,64928 May 19
Ajith K. K.
EntityIndividual
Role
Head of Human Resources
Executive VP & Chief Human Resources Officer
Shares24,000
Max Price₹107.07
Sell₹1,045,00024 May 19
K. Baby
EntityIndividual
Shares10,000
Max Price₹104.50
Sell₹1,024,99924 May 19
T. Davis
EntityIndividual
Shares10,000
Max Price₹102.50
Sell₹9,766,99817 May 19
Ashutosh Khajuria
EntityIndividual
Role
Member of the Board of Directors
Executive Director & CFO
Shares100,000
Max Price₹97.67
Sell₹8,377,87514 Feb 19
Ashutosh Khajuria
EntityIndividual
Role
Member of the Board of Directors
Executive Director & CFO
Shares100,000
Max Price₹83.78

Ownership Breakdown

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


Management Team

  • Shyam Srinivasan (57yo)

    MD, CEO & Director

    • Tenure: 9.3yrs
    • Compensation: ₹159.23m
  • Shalini Warrier (53yo)

    COO, Business Head of Retail Banking Products & Additional Executive Director

    • Ashutosh Khajuria (58yo)

      Executive Director & CFO

      • Tenure: 4yrs
      • Compensation: ₹28.49m
    • Anand Chugh

      Head Marketing Department and Assistant General Manager

      • Ajith K. K. (55yo)

        Executive VP & Chief Human Resources Officer

        • Surendran Amittathody

          Head of Retail Business and General Manager of RBD & IBD

          • C. Sasidharan

            Zonal Head and General Manager

            • Tenure: 5.7yrs
          • K. Sunny

            Strategic Initiative & Optimization Head and Additional General Manager

            • N Rajanarayanan

              Vice President of Marketing & Investor Relations

              • Samir Rajdev

                Company Secretary & Compliance Officer

                • Tenure: 0.08yrs

              Board Members

              • Balakrishnan Krishnamurthy (59yo)

                Additional Non-Executive Independent Director

                • Tenure: 1.3yrs
                • Compensation: ₹690.00k
              • Shyam Srinivasan (57yo)

                MD, CEO & Director

                • Tenure: 9.3yrs
                • Compensation: ₹159.23m
              • Shalini Warrier (53yo)

                COO, Business Head of Retail Banking Products & Additional Executive Director

                • Grace Koshie (66yo)

                  Chairperson

                  • Tenure: 1yrs
                  • Compensation: ₹2.09m
                • Shubhalakshmi Panse (65yo)

                  Independent Director

                  • Tenure: 5.6yrs
                  • Compensation: ₹2.18m
                • Manoj Fadnis (57yo)

                  Additional Non-Executive Independent Director

                  • Tenure: 0.6yrs
                • Ashutosh Khajuria (58yo)

                  Executive Director & CFO

                  • Tenure: 4yrs
                  • Compensation: ₹28.49m
                • AP Hota Hota (62yo)

                  Non-Executive Independent Director

                  • Tenure: 2yrs
                  • Compensation: ₹1.69m
                • Siddhartha Sengupta (60yo)

                  Additional Non-Executive Independent Director

                  • Tenure: 0.6yrs
                • Chandrasekhar Balagopal (66yo)

                  Independent Director

                  • Tenure: 4.6yrs
                  • Compensation: ₹1.10m

                Company Information

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


                Key Information

                • Name: The Federal Bank Limited
                • Ticker: FEDERALBNK
                • Exchange: NSEI
                • Founded: 1931
                • Industry: Diversified Banks
                • Sector: Banks
                • Market Cap: ₹191.266b
                • 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)GDR (EACH REPR 1 ORD) (REGS)GBUSDFeb 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 Analysis2020/01/26 13:01
                End of Day Share Price2020/01/24 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.