Federal Bank Q2 FY27 Results (NSE: FEDERALBNK)
Signal: Earnings grew
The read
The trajectory improved materially from the recent Q1FY27 base: standalone PAT rose 40.9% YoY to 134609 lakh and operating profit rose 35.4% to 222537 lakh, while gross NPA improved to 1.32% from 1.83% YoY. The key watchpoint is that employee cost rose 15.7% YoY after the fair-value ESOP accounting change, which reduced half-year PAT by 2449.06 lakh.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹9,211.42 Cr | +17.7% | N/A |
| EBIT | ₹2,225.37 Cr | +35.4% | |
| Net profit | ₹1,346.09 Cr | +40.9% | |
| EPS | ₹5.61 | +45.7% | |
| EBIT margin | 0% |
P&L walk
Standalone operating momentum strengthened: total income increased 17.7% YoY to 921142 lakh, operating profit rose 35.4% to 222537 lakh and PAT rose 40.9% to 134609 lakh, helped by lower provisions but partly offset by higher employee costs after the ESOP accounting-policy change.
Key positives
- Operating profit reached 222537 lakh, up 35.4% YoY versus total-income growth of 17.7%, strengthening pre-provision earnings momentum.
- Gross NPA improved to 1.32% from 1.83% YoY and net NPA to 0.11% from 0.48% YoY.
- Advances rose 20.3% YoY to 29422564 lakh and deposits rose 18.6% to 34269356 lakh.
- Provisions declined 5.8% YoY to 34219 lakh, supporting PAT growth of 40.9% to 134609 lakh.
Key concerns
- Employee cost increased 15.7% YoY to 49454 lakh following the fair-value ESOP accounting change, reducing half-year profit after tax by 2449.06 lakh.
- Other income rose 43.0% YoY to 149044 lakh, materially faster than total income growth of 17.7%; the quality of this contribution should be monitored.
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