Federal Bank Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 9,211.42 Cr (+17.72% YoY) and PAT growth of +45.10% YoY. Here's a quick read of what worked, what to watch, and what management said.
Quick Details| Results date | October 16, 2026 |
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| Quarter | Q2 FY 2026-2027 |
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| Revenue (Q2) | Rs. 9,211.42 Cr (+17.72% YoY) |
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| PAT (Q2) | Rs. 1,386.09 Cr (+45.10% YoY) |
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| EBITDA margin | 24.16% (+315 bps YoY) |
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| EPS (Q2) | Rs. 5.61 (+44.20% YoY) |
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| Market cap | Rs. 81,639.26 Cr |
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| CMP | Rs. 330.15 |
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Quarter Snapshot
Federal Bank's PAT grew 45.10% YoY to Rs.1,386.09 cr, with NII up 26.38% YoY as interest expense rose only 7.55%, and PPOP up 35.35% YoY. Asset quality reached its best level in the disclosed series with GNPA at 1.32%, NNPA at 0.17%, PCR at 87.66%, and provisions down 5.76% YoY, keeping credit costs well inside the 50-60 bps through-cycle band. Total income growth of 17.72% YoY came in ahead of the guided mid-teens trajectory, with NIM (5-6 bps/quarter) and RoA (3-4 bps/quarter) improvement guidance on track.
Key Investment Insights
Key Positives
- PAT grew 45.10% YoY to Rs.1,386.09 cr; normalized PAT (ex-Rs.24.49 cr ESOP accounting impact) grew 47.66% to Rs.1,410.58 cr
- NII grew 26.38% YoY to Rs.3,153.40 cr while interest expense grew only 7.55% YoY, producing a 658 bps YoY spread expansion
- PPOP grew 35.35% YoY to Rs.2,225.37 cr; operating margin expanded to 24.16% from 21.01% YoY
- GNPA fell to a record low 1.32% (from 1.83% YoY) and NNPA to 0.17% (from 0.48%); PCR improved to 87.66% from 74.29%
- Total income grew 17.72% YoY, ahead of the guided mid-teens trajectory; other income grew 37.73% YoY
- Provisions declined 5.76% YoY; H1 annualized credit cost proxy of 16.5 bps is well inside the 50-60 bps through-cycle band
- Retail Banking segment result grew 178.50% YoY with segment margin more than doubling to 7.79% from 3.08%
- CAR at 16.84% vs ~11.5% regulatory minimum; net worth grew 18.11% YoY to Rs.41,126 cr
Risk Factors
- Operating expenses grew 25.10% YoY, outpacing revenue growth of 17.72% YoY; employee cost rose 30.58% YoY, including Rs.32.73 cr from the ESOP accounting change
- Corporate/Wholesale Banking segment margin fell to 18.66% from 21.14% YoY as segment results grew 10.57% against 25.26% revenue growth
- Debt/Equity rose to 0.60 from 0.45 sequentially; borrowings increased Rs.3,472 cr in H1 FY27
- Consolidated CFO/PAT fell to 0.57x from 1.53x YoY as loan growth absorbed liquidity
- Effective tax rate rose to 26.40% from 25.43% YoY