InvestorQ : What about Federal Bank. The share is trading at almost all time low.should I consider it or wait for some more time.
jinny chaddha made post

What about Federal Bank. The share is trading at almost all time low.should I consider it or wait for some more time.

Answer
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Dhwani Mehta answered.
5 months ago


In the market today you can find a lot of value traps wherein the stock price looks very low by historical standards but these may not be great ideas in the market at this point of time. Federal Bank has corrected from about Rs.100 levels to Rs.40 levels. However, the company has problems in terms of a huge exposure to NRI flows from Kerala. Most of these economies are likely to be hit by the combination of the COVID-19 and the weak oil prices. Also, Federal Bank is expected to see a lot of defaults in its SME and MSME portfolio, which is likely to see a lot of pressure if the lockdown continues for more time and labour is hard to come by. Wait for more clarity on the banking sector and the impact of the pandemic before buying the stock.