Federal Bank Reports Decline in Key Financial Metrics Amid Strong Liquidity Position

Federal Bank, a midcap player in the private sector banking industry, has recently undergone an evaluation adjustment that reflects notable shifts in its financial metrics. The bank's financial performance for the quarter ending June 2025 has shown a decline, with key indicators such as Profit After Tax (PAT) registering at Rs 861.75 crore, reflecting a decrease of 14.6%. Additionally, the bank's Profit Before Depreciation, Interest, and Tax (PBDIT) has reached its lowest point at Rs 443.31 crore, while the Operating Profit to Net Sales ratio stands at 6.63%, also marking a low for the period.
On the liquidity front, Federal Bank reported its highest cash and cash equivalents at Rs 20,354.43 crore, indicating a solid liquidity position. However, the valuation metrics suggest a shift, with the stock now categorized as expensive, highlighted by a Price to Earnings (PE) ratio of 12.50 and a Price to Book Value of 1.46.

Despite these challenges, the bank has maintained a low Gross Non-Performing Asset (NPA) ratio of 1.91%, showcasing its strong lending practices. The stock's performance over the past year has yielded a return of 2.85%, outperforming the BSE500 index in the last three annual periods.

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