Rakesh Jhunjhunwala Stocks: Why Brokerage and Analysts Bullish on Federal Bank and Karur Vysya Bank?

The brokerage and analyst are bullish on bank stocks in Rakesh Jhunjhunwala – Federal Bank and Karur Vysa Bank – thanks to improving asset quality and strong breakout in both stocks.

Affectionately referred to as the Big Bull of the Indian market, billionaire investor Rakesh Jhunjhunwala holds a 3.7% stake in Federal Bank and a 4.5% stake in Karur Vysya Bank.

According to the latest company filings, the ace investor owns 75,721,060 shares of Federal Bank and 35,983,516 of Karur Vysya Bank for the quarter ended March 2022.

federal bank

At a record price of Rs 87, brokerage firm Hem Securities recommended hoarding the shares of the private bank with a price target of Rs 98, up 13%.

The brokerage’s optimism is based on increased advances, improved asset quality and one of the best retail and stable deposit franchises among private banks.

“Federal Bank advances increased by 3% QoQ / 10% YoY to Rs 1.476 billion, driven by strong growth in lending to agricultural enterprises and SMEs. The bank’s asset quality improved, with GNPA falling to 2.8% from 3.06% in the previous quarter, thanks to stronger recoveries and upgrades,” he said.

The bank’s liability deductible remains strong, with CASA plus TD Retail at 92%, and the bank intends to gradually increase its CASA deposits over the medium term, she noted.

“Despite the pandemic, the bank managed asset quality well and the restructured pool is performing well, with inflows remaining healthy,” the brokerage added.

Shares of Federal Bank were trading with a loss of nearly 1% at Rs 89 apiece during Monday’s intraday trading on BSE.

Karur Vysia Bank

At over Rs 2 billion, in the last 18 months, Karur Vysya Bank reported highest profits in Q4 22, while GNPL pool declined sequentially for Q3, while RoA remained at about 1%.

On Thursday, the stock experienced a strong breakout. Gaurav Ratnaparkhi, head of technical research at Sharekhan by BNP Paribas, said the stock experienced a strong breakout, accompanied by strong volumes.

As for the bar patterns, it broke out from an arrow pattern that formed on the daily chart, the expert pointed out.

“Furthermore, the stock managed to break above its crucial swing on the daily chart. The positive momentum should continue. On the upside, 54 and 56.60 will be the medium-term targets,” he added.

On Friday’s closing price of Rs 48.20 and the target of Rs 56.60, the increase turns out to be around 18%.

According to latest company holdings, Rakesh Jhunjhunwala and Associates publicly owns 34 shares during the quarter ended March 2022. The value of these shares was pegged at Rs. 29,322.7 crores in June 2022, according to the platform. stock analysis