Q1FY25 earnings season has started. The budget is all set to be presented on July 23. The share market is also at its all-time high. Meanwhile, brokerage SBI Securities has suggested buying this bank stock for three months which recorded its all-time high in its last trading session.

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On Friday, The 30-share BSE Sensex advanced 622 points, or 0.78 per cent, to a record closing level of 80,519.34. The NSE Nifty gained 186.20 points, or 0.77 per cent, to close at a new high of 24,502.15.

Now, let's look at the brokerage's views on bank stock.

Bank stock to buy before Budget 2024

SBI Securities has recommended buying Federal Bank stock for three months. It has been suggested to enter in the range of Rs 193-197. The brokerage has given a target price of Rs 215. On Friday, the stock closed at Rs 195.5 each. This means it has an upside of up to 10 per cent from its current price.

Why brokerage is bullish on Federal Bank stock

Federal Bank has a network of 1504 branches and 12015 ATMs. As of March 2024, its deposits are Rs 2.1 lakh crore and deposits are Rs 2.5 lakh crore. The business update for Q1 is healthy. The growth of the retail segment is healthy which is a high-margin business.

According to the brokerage, asset quality and margins are also expected to improve. After the retirement of CEO and Managing Director Shyam Srinivasan, the search committee is looking for the right person. Talking about valuation, it is trading at 1.3 multiple of the estimated P/BV i.e. price-to-book value of FY25. There has been a jump of 12 per cent in one month and 25 per cent in three months.

The views/suggestions/advice expressed here in this article are solely by the brokerage firm. Zee Business suggests its readers consult their investment advisers before making financial decisions.