Federal Bank rises after foreign brokerage initiates coverage with buy

Federal Bank rose 3.26% to Rs 58.60 at 12:20 IST on BSE on reports that a foreign brokerage has intiated coverage on the stock with a buy rating.

Meanwhile, the S&P BSE Sensex was up 49.68 points or 0.19% at 26,008.31.

On BSE, so far 4.49 lakh shares were traded in the counter as against average daily volume of 3.53 lakh shares in the past one quarter.

The stock hit a high of Rs 59.40 and a low of Rs 57 so far during the day. The stock had hit a record high of Rs 79.73 on 3 July 2015. The stock had hit a 52-week low of Rs 52.45 on 2 November 2015.

The stock had outperformed the market over the past one month till 26 November 2015, sliding 0.79% compared with the Sensex's 5.13% fall. The scrip had, however, underperformed the market in past one quarter, declining 6.35% as against Sensex's 0.95% rise.

The mid-cap private-sector bank has equity capital of Rs 343.56 crore. Face value per share is Rs 2.

The foreign brokerage reportedly sees attractive risk-reward ratio for Federal Bank. The bank's improving business mix augurs well for future, the brokerage reportedly said. Strong operating leverage of the bank will support its earnings, the brokerage added.

Federal Bank's net profit fell 32.9% to Rs 161.28 crore on 0.9% growth in total income to Rs 2084.53 crore in Q2 September 2015 over Q2 September 2014.

Federal Bank is one of the leading private sector banks in India.

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