Rakesh Jhunjhunwala Portfolio Stock: The share price of Federal Bank on Monday, June 28, rose almost 2 percent to Rs 87.50 against the closing price of the previous trading day. The price of this stock included in the portfolio of Big Bull Rakesh Jhunjhunwala has almost doubled since last one year. Its prices are trading at 90 percent more than the 52-week low. At least three research and brokerage firms have given buy advice on Federal Bank stock. Some experts have expressed hope that if this stock is bought at the current price, then a return of 28 percent can be achieved. This stock is currently trading at 6.5 percent less than the 52-week top level of Rs 92.40. Some analysts are considering Federal Bank as a better option for medium to long term investment.
According to Vishal Balbhadruni, Banking Analyst at CapitalVia Global Research, the investment in Federal Bank has given stable returns of 8-10 per cent since FY17 and its valuation is correct when it comes to price-to-book value. Rakesh Jhunjhunwala held 4.72 crore shares at the end of March 2021 quarter, which is equivalent to 2.40 per cent stake. Even in the quarter ended December 2020, his stake in Federal Bank was only 2.40 percent.
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This is the advice of experts regarding investment
- According to Federal Bank’s annual report for FY 2021, its balance sheet has strengthened and this bank is focusing on building gold loans portfolio. Apart from this, the bank has also launched a new credit card product. According to analysts at Motilal Oswal Financial Services, Federal Bank’s operating performance in terms of advances and deposits has been good and business trends have also been healthy. According to analysts, the business of the bank will increase and this will increase its income. Brokerage firm Motilal Oswal has advised to buy it and has estimated that its share price may reach Rs 110 per share with a jump of 28 percent.
- The bank had recently announced a capital infusion of Rs 916 crore from IFC and proposed to increase the capital base in several ways. HDFC Securities Institutional Equities revised its target price from Rs 97 to Rs 98, up 14.35 per cent. According to analysts at this research and brokerage firm, equity infusion through IFC will provide long-term capital to the bank and provide better opportunities for growth. The brokerage firm has given a buy on the target price of Rs 98, including equity infusion in its estimate.
- According to Angel Broking, investment in Federal Bank shares can give a return of 28 per cent as the Provisioning Coverage Ratio (PCR) of the bank is 67 per cent, which is sufficient.
(Article: Surbhi Jain)
(The stock recommendations in the story are those of the relevant research analyst and brokerage firm. Financial Express Online does not bear any responsibility for this investment advice. Investing in capital markets is subject to risks and should be consulted with your advisor before investing.)