Are Federal Bank latest results good or bad?

Federal Bank has reported its financial results for the quarter ending June 2025, which highlight several operational trends. The bank's cash and cash equivalents have reached a six-and-a-half-year high of Rs 20,354.43 crore, indicating an enhancement in short-term liquidity. However, the overall financial performance reflects several challenges.
The profit before tax less other income (PBT) has significantly declined to Rs 43.15 crore, representing a substantial year-on-year decrease of 90.23%. Additionally, the profit after tax (PAT) has also seen a reduction of 14.6% year-on-year, amounting to Rs 861.75 crore, suggesting a negative trend in profitability.

The operating profit has reached a low of Rs 443.31 crore, marking the lowest figure in the last five quarters, with an operating profit margin of only 6.63%. Furthermore, non-operating income has constituted a significant portion of PBT at 96.27%, raising concerns regarding the sustainability of the bank's income sources. Earnings per share (EPS) have fallen to Rs 3.51, further emphasizing the decline in profitability for shareholders.

In light of these results, Federal Bank has experienced an adjustment in its evaluation, reflecting the challenges faced in its financial performance. The interest earned has shown a year-on-year growth of 5.62%, a decrease from the previous year's growth of 26.0%. Similarly, net profit growth has declined to -14.64% compared to 18.25% in the prior year, indicating a shift in operational dynamics. Overall, the data presents a complex picture of Federal Bank's financial health, with both liquidity improvements and profitability challenges.