2QFY2013 Result Update | Banking

October 23, 2012

Federal Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 2QFY13

506 350 215

NEUTRAL
CMP Target Price
% chg (qoq)
2.9 0.9 13.0

`488 -

2QFY13
492 347 190

2QFY12
474 361 191

% chg (yoy)
6.6 (3.2) 12.5

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Banking 8,344 1.2 495/322 129,006 10 18,710 5,691 FED.BO FB@IN

Source: Company, Angel Research

During 2QFY2013, Federal Bank reported an operating profit decline of 3.2% yoy. However 57.8% yoy lower provisioning expenses aided the bank to post a net profit growth of 12.5% yoy to `215cr. NIMs improve sequentially; Asset quality pressure easing: The bank witnessed a modest growth of 8.0% yoy in advances, while the growth in deposits was subdued at 4.8% yoy. Within advances, retail and SME & agri book registered a healthy growth of 17.6% and 15.4% yoy, respectively, while the corporate book de-grew by 1.7% yoy. On the deposits front, the bank witnessed a strong growth of 23.9% yoy in its current deposits, while growth in savings deposits was healthy at 15.5% yoy. Consequently, CASA ratio improved by 5bp sequentially and 297bp yoy to 28.7%. The reported NIMs for the bank improved by 16bp qoq to 3.6%, as yields on advances and investments improved sequentially by 23bp and 15bp, while the increase in cost of deposits was limited to 6bp. Other income excluding treasury remained flat on a yoy basis, on account of lower recoveries (`10cr compared to `14cr in 2QFY2012) and a sharp decline of 35.5% yoy in forex income. Growth in fee income was robust at 15.0% yoy. The banks slippages for 2QFY2013 stood at `144cr (retail `42cr, SME - `90cr, Agri `13cr and corporate - nil). Annualized slippage rate at 1.5% came in much lower compared to the quarterly average of 4.0% since 1QFY2011. PCR for the bank continues to remain strong at 82.9%. The bank restructured accounts worth `230cr in 2QFY2013 taking the total outstanding restructured book to `2,538cr (`1,956cr of standard restructured assets). The bank has exposure of `200cr to NAFED, which remains a servicing account. The bank remain watchful of 8-10 accounts amounting to `700-800cr (including NAFED). Outlook and valuation: The bank has been expanding its branch network and increasing its business profile at a strong pace which should lead to healthy growth in its balance sheet over the next two years. Further with the asset quality of the bank seeing improvement, we expect lower provisioning expenses in FY2013 than in FY2012. Although the de-regulation of NRE TD deposits has not had any significant effect on the low cost deposit base of the bank till now, we remain wary of the possible incremental higher costs due to shift from NRE SBs to NRE TDs. Even the stock has surged significantly and now trades at 1.2x FY2014E P/BV. We recommend a Neutral rating on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 22.5 39.9 37.7

Abs. (%) Sensex Federal Bank

3m 10.9 19.6

1yr 11.5 27.2

3yr 11.3 87.3

Key financials (Standalone)

Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%) Source: Company, Angel Research FY2011
1,747 23.8 587 26.4 3.8 34.3 14.2 1.6 1.2 12.0

FY2012
1,953 11.8 777 32.3 3.6 45.4 10.7 1.5 1.4 14.4

FY2013E
2,068 5.8 784 1.0 3.3 45.9 10.6 1.3 1.2 13.1

FY2014E
2,384 15.3 884 12.8 3.2 51.7 9.4 1.2 1.1 13.3

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Sourabh Taparia
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Please refer to important disclosures at the end of this report

Federal Bank | 2QFY2013 Result Update

Exhibit 1: 2QFY2013 performance (Standalone)

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others - on others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee Income - Treasury Income - Recoveries from written off a/c - Forex Income Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Provisions for Investments - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

2QFY13 1,526 1,153 354 13 6 1,020 506 139 104 81 36 10 12 645 296 159 136 350 30 20 (5) 15 319 104 215 32.6

1QFY13 1,537 1,163 355 17 2 1,045 492 124 98 67 26 7 24 616 269 152 117 347 63 76 (21) 7 284 93 190 32.9

% chg (qoq) (0.7) (0.9) (0.3) (23.5) 275.5 (2.4) 2.9 12.1 5.6 21.5 36.5 47.1 (50.1) 4.8 9.7 4.6 16.4 0.9 (51.5) (73.6) 102.4 12.5 11.5 13.0 (30)bp

2QFY12 1,368 1,050 310 6 2 893 474 117 103 70 14 14 19 591 230 128 102 361 72 57 7 8 289 98 191 33.9

% chg (yoy) 11.5 9.8 14.2 124.6 206.5 14.1 6.6 19.2 0.7 15.0 154.7 (23.5) (35.5) 9.1 28.5 24.3 33.8 (3.2) (57.8) (64.8) 78.3 10.4 6.3 12.5 (126)bp

1HFY13 3,062 2,316 709 29 7 2,065 998 264 202 148 62 18 36 1,261 565 312 253 696 93 96 (25) 22 603 197 405 32.8

1HFY12 2,613 2,027 570 12 4 1,678 934 234 204 134 30 37 33 1,168 453 259 194 715 206 171 22 13 509 172 337 33.7

% chg (qoq) 17.2 14.3 24.4 148.7 23.0 23.0 6.8 12.8 (1.0) 10.2 106.2 (52.5) 24.4 8.0 24.8 20.3 30.9 (2.7) (54.8) (43.9) 72.2 18.4 14.9 20.2 (99)bp

Exhibit 2: 2QFY2013 Actual vs Angel estimates

Particulars (` cr) Net interest income Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 506 139 645 296 350 30 319 104 215

Estimates 503 125 629 273 356 81 274 89 185

Var. (%) 0.5 11.3 2.6 8.3 (1.7) (62.6) 16.4 17.0 16.1

October 23, 2012

Federal Bank | 2QFY2013 Result Update

Exhibit 3: 2QFY2013 performance (Standalone)

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits Yield on advances Yield on investments Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) NPA to avg. assets (%)
Source: Company, Angel Research

2QFY13 36,299 49,518 73.3 2,458 11,758 14,216 28.7 15.8 15.1 7.6 12.8 7.9 3.6 45.8 1,435 3.8 245 0.6 82.9 1.5 0.1

1QFY13 38,043 50,558 75.2 2,514 11,977 14,491 28.7 15.5 14.7 7.6 12.5 7.8 3.4 43.7 1,409 3.6 236 0.6 83.2 3.1 0.5

% chg (qoq) 2QFY12 (4.6) (2.1) (194)bp (2.2) (1.8) (1.9) 5bp 34bp 36bp 6bp 23bp 15bp 16bp 207bp 1.9 23bp 3.8 (4)bp (31)bp (154)bp (36)bp 33,607 47,263 71.1 1,983 10,183 12,166 25.7 15.1 14.0 7.4 12.7 7.2 3.8 38.9 1,250 3.6 196 0.6 84.3 3.3 0.4

% chg (yoy) 8.0 4.8 220bp 23.9 15.5 16.8 297bp 74bp 103bp 17bp 1bp 70bp (19)bp 691bp 14.8 22bp 25.2 0bp (142)bp (179)bp (28)bp

Balance sheet growth moderates; NIMs improves sequentially

During 2QFY2013, the bank witnessed a modest growth of 8.0% yoy in advances, while growth in deposits was subdued at 4.8% yoy. Within advances, retail and SME & Agri book registered a healthy growth of 17.6% and 15.4% yoy, respectively, while the corporate book de-grew by 1.7% yoy. Healthy growth in retail advances was partly aided by a strong growth in the gold loan book (total gold loans at `5,000cr as of 2QFY2013, of which `1,667cr are classified as agri loans as gold is collateral for them). The banks exposure to corporate borrowers rated below-A has risen from 21% in 2QFY2012 to 30% in 2QFY2013, on account of repayments by corporate and reduction in unrated borrowers. The management has guided for loan growth of 16-18% for FY2013, as they have built a robust pipeline for corporate loans and would continue their focus on higher retail and SME lending. On the deposits front, the bank witnessed a strong growth of 23.9% yoy in current deposits, while growth in savings deposits was healthy at 15.5% yoy. Consequently, the overall CASA deposits registered a healthy growth of 16.8% and the CASA ratio as of 2QFY2013 stood at 28.7%, which was higher by 5bp sequentially and 297bp on a yoy basis.

October 23, 2012

Federal Bank | 2QFY2013 Result Update

As of 2QFY2013, the banks branch network stood at 1010 (54% in Kerala). The management has plans to add 35-40 branches in the near term. As of 2QFY2013, 62% of the banks loan exposure and 45% of the deposits are from outside the state of Kerala.

Exhibit 4: Advance growth qoq

Adv. yoy chg (% ) 35.0 30.0 25.0 20.0 15.0 10.0 71.1 71.0 77.2 75.2 73.3 Dep. yoy chg (%) CDR (%, RHS) 78.0 76.0 74.0 72.0 70.0

Exhibit 5: CASA ratio rises qoq

(%) 30.0 28.5 27.2 27.0 25.7 25.5 24.0 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 28.2 27.5 28.7

21.6 30.9

17.6 26.6

18.2 13.8

19.0 17.8

2QFY12 3QFY12 4QFY12 1QFY13

Source: Company, Angel Research

8.0 4.8
2QFY13

5.0

68.0 66.0

Source: Company, Angel Research

During 2QFY2013, the yields on advances and investments improved sequentially by 23bp and 15bp to 12.8% and 7.9%, respectively. The cost of deposits also increased sequentially by 6bp to 7.6%. Consequently, the NIMs improved by 16bp qoq to 3.6%. Going forward, the management has guided for NIMs to remain in the range of 3.5-3.6%.

Exhibit 6: 23bp sequentially higher yield on advances ...

(%) 14.00 13.00 12.00 11.00 10.00 9.00 8.00 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13
Source: Company, Angel Research

Exhibit 7: ...aided 16bp qoq improvement in NIMs

(%) 4.00 3.94 3.77 3.56 3.42 3.58

12.74

12.91

12.52

12.52

12.75

3.80 3.60 3.40 3.20 3.00

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Source: Company, Angel Research

Fee income remains subdued

During 2QFY2013, other income excluding treasury remained flat on a yoy basis, on account of lower recoveries and sharp decline in forex income. Recoveries from written-off accounts, as guided by the management, came in significantly lower at `10cr compared to `14cr in 2QFY2012. Forex income declined sharply by 35.5% yoy to `12cr reflecting a decline in exports and increase in competition. However, the growth in fee income was robust at 15.0% yoy to `81cr. The treasury income came in at `36cr compared to `14cr in 2QFY2012.

October 23, 2012

Federal Bank | 2QFY2013 Result Update

Asset quality pressures easing

The banks slippages for 2QFY2013 stood at `144cr (retail `42cr, SME - `90cr, Agri `13cr and corporate - nil). The annualized slippage rate at 1.5% is much lower compared to the quarterly average of 4.0% since 1QFY2011. The gross NPA ratio as of 2QFY2013 stands at 3.8% (3.6% in 1QFY2013), while the net NPA ratio stands at 0.6% (0.6% in 1QFY2013). The PCR of the bank continues to remain strong at 82.9% (83.2% in 1QFY2013). The bank restructured accounts worth `230cr in 2QFY2013 taking the total outstanding restructured book to `2,538cr (`1,956cr of standard restructured assets). The bank has exposure of `200cr to NAFED, which has neither been classified as NPA nor restructured as the account is still a servicing one. The bank remain watchful of 8-10 accounts amounting to `700-800cr (including NAFED).

Exhibit 8: NPA amounts increase sequentially

Gross NPAs (` cr) Net NPAs (` cr) PCR (%, RHS)

Exhibit 9: Credit cost trends

95.0 90.0 85.0 80.0 0.8 0.6 0.4 0.2 (0.2) (0.4) 2QFY12 3QFY12
Source: Company, Angel Research

1,800 1,500 1,200 900 600 300 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13
Source: Company, Angel Research

0.6 0.4 0.5

83.0

80.5

81.1

80.2

80.0

0.1

75.0 70.0 65.0 60.0

1,250 196

1,363 244

1,301 199

1,409 236

1,435 245

(0.3) 4QFY12

1QFY13

2QFY13

Exhibit 10: Opex trends

Staff exps (` cr) Other opex (` cr) CIR (%, RHS)

Exhibit 11: Opex-to-avg. assets trends

45.8 50.0 40.0 (%) 2.0 1.9 1.8 1.7 1.6 1.5 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13
Source: Company, Angel Research

350 300 250 200 150 100 50 2QFY12 3QFY12 38.9 37.1

42.9

43.7

1.9 1.7

1.9

136

102

109

133

117

30.0 20.0

1.7

1.7

128

138

146

152

159

10.0 -

4QFY12

1QFY13

2QFY13

Source: Company, Angel Research

October 23, 2012

Federal Bank | 2QFY2013 Result Update

Investment arguments
Asset quality has improved
During FY2011, the bank had witnessed elevated NPAs from its retail and SME loan book. However, the management has been taking various steps to stabilize its asset-quality woes (which are reflected in the asset quality improvement in the last few quarters and lower slippage levels in 1HFY2013 compared to FY2011) and expects higher recoveries and lower slippages going forward, subject to the external environment.

Outlook and valuation

The bank has been expanding its branch network and increasing its business profile at a strong pace which should lead to healthy growth in its balance sheet over the next two years. Further with asset quality seeing improvement, we expect lower provisioning expenses in FY2013 than in FY2012. Although the deregulation of NRE TD deposits has not had any significant effect on the low cost deposit base of the bank till now, we remain wary of the possible incremental higher costs due to shift from NRE SBs to NRE TDs. Even the stock has surged significantly and now trades at 1.2x FY2014E P/BV. We recommend a Neutral rating on the stock.

Exhibit 12: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage ratio
Source: Angel Research

Earlier estimates FY2013 20.0 20.0 26.0 3.2 0.1 15.0 15.0 2.7 79.6 FY2014 20.0 20.0 23.9 3.2 12.2 15.0 15.0 2.4 76.7

Revised estimates FY2013 18.0 18.0 26.4 3.3 3.1 18.0 24.0 2.3 80.4 FY2014 20.0 20.0 24.3 3.2 6.5 13.0 13.0 2.0 79.6

October 23, 2012

Federal Bank | 2QFY2013 Result Update

Exhibit 13: Change in estimates

FY2013 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2014 Earlier estimates 2,412 598 3,009 1,295 1,714 385 1,330 431 898 Revised Var. (%) estimates 2,384 585 2,968 1,335 1,633 324 1,309 425 884 (1.2) (2.2) (1.4) 3.1 (4.8) (15.8) (1.6) (1.6) (1.6)

Earlier estimates 2,060 533 2,593 1,126 1,467 329 1,138 369 769

Revised Var. (%) estimates 2,068 549 2,617 1,182 1,435 274 1,161 377 784 0.4 3.0 0.9 4.9 (2.2) (16.7) 2.0 2.0 2.0

Exhibit 14: P/ABV band

800 700 600 500 400 300 200 100 0
Oct-06 Feb-09 May-07 Nov-10 Sep-09 Dec-07 Jun-11 Apr-10 Jan-12 Jul-08 Mar-06 Aug-12 Mar-13

Price (`)

0.3x

0.6x

0.9x

1.2x

1.5x

Source: Company, Angel Research

October 23, 2012

Federal Bank | 2QFY2013 Result Update

Exhibit 15: Recommendation summary

Company Reco. AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Accumulate Neutral Neutral Buy Accumulate Accumulate Reduce Reduce Accumulate Accumulate Neutral Neutral Neutral Accumulate Neutral Accumulate Neutral Accumulate Neutral Neutral Buy Accumulate Neutral Neutral Accumulate Buy Neutral CMP (`) 1,220 488 633 1,079 22 399 143 113 783 298 51 443 72 408 109 98 180 80 1,162 294 818 2,235 122 77 205 68 57 Tgt. price (`) 1,402 1,245 25 453 131 97 864 340 447 112 87 966 2,353 226 81 Upside (%) 14.9 15.4 11.8 13.4 (8.2) (14.1) 10.3 14.2 9.7 14.7 8.4 18.0 5.3 10.6 19.9 FY2014E P/ABV (x) 1.7 1.2 3.6 1.7 0.9 2.0 0.6 0.7 0.9 0.7 0.6 0.8 0.7 0.7 0.7 0.6 0.6 0.5 1.0 0.6 0.8 1.4 0.7 0.8 0.7 0.5 0.7 FY2014E Tgt. P/ABV (x) 1.9 2.0 1.1 2.3 0.5 0.6 1.0 0.8 0.7 0.7 0.6 1.0 1.5 0.8 0.58 FY2014E FY12E-14E EPS P/E (x) CAGR (%) 8.8 9.4 17.6 13.2 5.7 9.5 3.9 4.6 5.6 4.4 4.5 5.2 3.4 4.0 4.5 4.3 4.3 3.8 6.2 4.7 4.9 8.6 4.5 4.6 4.4 3.1 5.0
#

FY2014E RoA (%) 1.6 1.1 1.9 1.4 0.9 1.5 0.9 0.9 1.0 0.8 0.7 0.9 0.6 0.8 0.8 0.9 1.1 0.6 1.3 0.9 1.0 1.0 0.7 0.6 0.8 0.7 0.5

FY2014E RoE (%) 20.2 13.3 22.0 15.5 16.9 23.5 15.7 15.3 17.2 16.3 15.5 15.3 14.7 15.1 15.9 14.4 16.3 13.6 17.7 13.9 17.3 17.7 16.8 14.4 16.3 16.2 13.0

16.0 6.7 27.9 20.9 4.2 23.5 (0.4) 1.0 7.1 20.8 35.5 7.2 100.1 (2.2) 3.1 20.1 2.5 27.1 6.5 26.5 7.4 21.7 11.7 7.9 19.8 20.7 12.1

Source: Company, Angel Research; Note: *Target multiples=SOTP target price/ABV (including subsidiaries); Without adjusting for SASF

October 23, 2012

Federal Bank | 2QFY2013 Result Update

Income statement (Standalone)

Y/E March (` cr) NII - YoY growth (%) Other income - YoY growth (%) Operating income - YoY growth (%) Operating expenses - YoY growth (%) Pre-prov. profit - YoY growth (%) Prov. & cont. - YoY growth (%) PBT - YoY growth (%) Prov. for taxation - as a % of PBT PAT - YoY growth (%) FY08 868 21.1 395 30.5 1,263 23.9 469 15.5 794 29.6 294 34.2 500 26.9 132 26.4 368 25.7 FY09 1,315 51.5 516 30.6 1,831 45.0 571 21.9 1,260 58.6 467 58.8 793 58.6 293 36.9 500 36.0 FY10 1,411 7.3 531 2.9 1,942 6.0 677 18.5 1,265 0.4 405 (13.2) 860 8.4 395 46.0 465 (7.2) FY11 1,747 23.8 517 (2.7) 2,263 16.6 836 23.5 1,427 12.8 525 29.6 902 4.9 315 34.9 587 26.4 FY12E 1,953 11.8 532 3.0 2,486 9.8 979 17.1 1,506 5.6 337 (35.9) 1,170 29.7 393 33.6 777 32.3 FY13E 2,068 5.8 549 3.1 2,617 5.3 1,182 20.7 1,435 (4.8) 274 (18.7) 1,161 (0.7) 377 32.4 784 1.0 FY14E 2,384 15.3 585 6.5 2,968 13.4 1,335 13.0 1,633 13.8 324 18.2 1,309 12.8 425 32.4 884 12.8

Balance sheet (Standalone)

Y/E March (` cr) Share Capital Reserves & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY08 171 3,755 25,913 20.1 792 470 1,405 32,506 2,356 390 10,027 18,905 26.9 233 597 32,506 29.6 FY09 171 4,155 24.3 749 470 1,108 2,214 1,223 FY10 171 4,519 12.0 1,227 320 1,380 2,319 405 FY11 171 4,938 43,015 19.3 1,582 306 1,445 51,456 2,935 813 14,538 31,953 18.6 290 927 51,456 17.8 FY12E 171 5,535 48,937 13.8 3,935 306 1,742 60,627 2,424 1,108 17,402 37,756 18.2 326 1,610 60,627 17.8 FY13E 171 6,151 18.0 4,603 298 1,956 2,599 1,297 FY14E 171 6,836 20.0 5,483 291 2,404 2,772 1,545

32,198 36,058

57,746 69,295

38,851 43,676

70,925 84,481

12,119 13,055 22,392 26,950 18.4 281 622 19.5 20.4 290 658 12.4

20,225 24,031 44,552 53,462 18.0 370 1,883 17.0 20.0 428 2,243 19.1

38,851 43,676

70,925 84,481

October 23, 2012

Federal Bank | 2QFY2013 Result Update

Ratio analysis
Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages Loan Loss Prov./Avg. Assets Provision Coverage Per Share Data (`) EPS ABVPS DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis (%) NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Leverage (x) RoE 3.0 1.0 2.0 0.3 2.3 1.1 3.4 1.6 1.7 0.5 1.3 10.7 13.8 3.7 1.3 2.4 0.2 2.6 1.2 3.8 1.6 2.2 0.8 1.4 8.7 12.2 3.4 1.0 2.4 0.3 2.7 1.0 3.7 1.6 2.1 1.0 1.1 9.2 10.3 3.7 1.1 2.6 0.1 2.7 1.0 3.7 1.8 1.9 0.7 1.2 9.7 12.0 3.5 0.60 2.9 0.1 3.0 0.8 3.8 1.7 2.1 0.7 1.4 10.4 14.4 3.1 0.42 2.7 0.1 2.8 0.7 3.6 1.8 1.8 0.6 1.2 10.9 13.1 3.1 0.4 2.7 0.0 2.7 0.7 3.4 1.7 1.7 0.5 1.1 11.7 13.3 22.6 2.1 0.8 16.6 1.9 1.0 17.9 1.8 1.0 14.2 1.6 1.7 10.7 1.5 1.8 10.6 1.3 1.7 9.4 1.2 2.1 21.5 229.2 4.0 29.3 252.6 5.0 27.2 273.9 5.0 34.3 298.3 8.5 45.4 333.3 9.0 45.9 369.3 8.5 51.7 409.3 10.0 2.4 0.2 1.7 0.7 90.8 2.6 0.3 3.0 1.0 88.4 3.0 0.5 3.3 1.0 84.3 3.5 0.6 3.2 1.0 83.4 3.3 0.5 2.1 0.4 84.7 2.9 0.6 2.3 0.4 80.4 2.5 0.5 2.0 0.4 79.6 25.1 73.0 22.5 19.1 24.5 69.5 20.2 18.4 26.2 74.7 18.4 16.9 26.9 74.3 16.8 15.6 27.5 77.2 16.6 15.9 26.4 77.2 15.8 15.0 24.3 77.2 14.7 14.0 3.1 37.1 1.3 13.8 3.8 31.2 1.4 12.2 3.5 34.9 1.1 10.3 3.8 36.9 1.2 12.0 3.6 39.4 1.4 14.4 3.3 45.2 1.2 13.1 3.2 45.0 1.1 13.3 FY08 FY09 FY10 FY11 FY12E FY13E FY14E

October 23, 2012

10

Federal Bank | 2QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Federal Bank No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

October 23, 2012

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