Nomura has maintained ‘buy’ call on Federal Bank, setting a target price of ₹240 per share, which implies a 24% upside from the current market price of ₹193.25. Federal Bank is transitioning from a ‘value’ to a ‘quality’ play and is now considered one of Nomura’s top midcap banking ideas.
The bank has outperformed its peers in terms of deposit growth and asset quality, establishing itself as a strong contender in the midcap banking space. At 1.2x FY26 forecast price-to-book (P/B) and 9x FY26 price-to-earnings (P/E), Nomura finds the valuations attractive, offering considerable upside potential.
Additionally, the bank offers the highest earnings yield among private banks, excluding Bandhan Bank, making it a compelling investment choice for investors looking for value in the banking sector.
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