Why is Federal Bank falling/rising?

Sep 10 2025 09:29 PM IST
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As of 10-Sep, Federal Bank Ltd's stock price is Rs 195.70, up 2.14%, but delivery volume has dropped 46.38%, indicating reduced investor interest. Despite strong long-term growth and recent gains, negative quarterly results raise concerns about valuation and future performance.
As of 10-Sep, Federal Bank Ltd's stock price is currently at Rs 195.70, reflecting an increase of Rs 4.1 or 2.14%. The stock has been gaining for the last two days, with a total return of 2.76% during this period. It has outperformed its sector by 1.79% today and reached an intraday high of Rs 196.8. However, despite these positive movements, the stock's delivery volume has decreased significantly by 46.38% compared to the 5-day average, indicating falling investor participation. The bank's strong lending practices, characterized by a low Gross NPA ratio of 1.91% and a robust long-term growth in net profits at a CAGR of 20.15%, support its recent price increase. Conversely, negative results reported for the quarter ending June 25, including a 14.6% decline in PAT and the lowest operating profit to net sales ratio, raise concerns about the stock's valuation, which is considered expensive relative to its peers.

In the broader market context, Federal Bank's short-term return of 1.16% over the past week slightly outpaces the Sensex's return of 1.06%. However, the stock has underperformed over the past month, with a decline of 0.23% compared to the Sensex's gain of 1.96%. While the stock has shown strong long-term performance, with a 63.70% increase over three years and a remarkable 281.48% rise over five years, the recent quarterly results and high institutional holdings suggest a cautious outlook among investors. The mixed signals from both the stock-specific factors and broader market context indicate that while there are positive elements supporting the stock's rise, significant concerns remain that could impact future performance.
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