Federal Bank surged nearly 5 percent, in an otherwise subdued market, after the lender reported a strong set of numbers for the March-quarter of FY19. The bank reported an over two-fold jump in net profit in Q4 at Rs 381.51 crore on account of lower provisioning and higher interest income.

Share Market Live

NSE

The private sector lender had posted a standalone net profit of Rs 144.99 crore in the fourth quarter of 2017-18 fiscal.

The stock gained as much as 4.8 percent to its day's high of Rs 102.45 on BSE. At 02:00 PM, it was trading 3.38 percent higher at Rs 101.05 as compared to a 0.92 percent (357 points) fall in BSE Sensex at 38,605.

Total income of the bank rose to Rs 3,444 crore in the March quarter of 2018-19, from Rs 2,862 crore in the same period last fiscal, Federal Bank said in a BSE filing.

Provisioning for bad loans during the quarter more than halved to Rs 177.76 crore, as against Rs 371.53 crore in the corresponding period of 2017-18.

Interest income increased to Rs 2,413 crore during the fourth quarter from Rs 1,951 crore earlier. For the full 2018-19 fiscal, Federal Bank reported a standalone net profit of Rs 1,243.89 crore, up 41.5 per cent from Rs 878.85 crore in 2017-18.

Brokerages remained bullish on the stock on the back of robust numbers in Q4.

Jefferies maintained its 'buy' rating and raised its target price to Rs 114 from Rs 104 earlier. Meanwhile, Morgan Stanley maintained its 'equal weight' rating on Federal Bank with a target price of Rs 95.

Citigroup also maintained its 'neutral' rating on Federal Bank and raised its target price to Rs 110 from Rs 90 earlier.

"The asset quality surprised positively, and margin should remain at 3.2 percent. We increase our EPS (earnings per share ) estimate by 2.5-3 percent," Jefferies said in a report.

Whereas, Morgan Stanley said that the key positive for the bank was strong asset quality while margin progression was the only negative, which declined 5 basis points (bps) (QoQ).

One basis point is a hundredth of a percentage point.