Federal Bank rally may limit fresh upside; Bandhan Bank shares offer better valuation comfort: Expert

Market expert Pradeep Haldar has urged caution on Federal Bank despite retaining a constructive view on the stock’s technical setup, saying investors should avoid chasing the rally at current levels and instead look at Bandhan Bank for relatively better risk-reward within private lenders.

Responding to a viewer query on Business Today’s Daily Calls, Haldar said Federal Bank continues to trade above its 20, 50 and 100 exponential moving averages, a sign that the broader structure remains healthy. But with the stock having already seen a meaningful run-up, he stopped short of recommending fresh aggressive accumulation.

Strong chart, but limited room for aggressive buying

Haldar’s message on Federal Bank was clear: hold, but do not overcommit. “Federal Bank structure... looks very good,” he said, while adding that the stock has “already risen a lot,” indicating that much of the near-term momentum may already be priced in.

For existing investors, his advice was to maintain current quantity rather than average up. He pegged a trailing stop loss at around Rs 307, suggesting that capital protection should now take priority over fresh exposure.

Bandhan Bank emerges as the preferred private bank bet

While Federal Bank remains technically sound, Haldar used the opportunity to flag Bandhan Bank as the more attractive play in the private banking pack. According to him, the stock has been sustaining above the Rs 210-212 zone and is also holding the Rs 200 mark, a level he described as significant given the bank’s trading history since mid-2024.

“Bandhan Bank' chart  is looking very good ,” he said, adding that the stock had struggled to reclaim these levels after slipping below Rs 200 around June-July 2024. That makes the current move more meaningful from a technical standpoint.

Why valuation comfort matters now

The broader market backdrop also adds context to Haldar’s preference. In the wider discussion, he pointed to strength in private banks as one of the key drivers of the day’s market rally, even as investors remained alert ahead of heavyweight earnings and potential volatility.

Against that backdrop, Bandhan Bank appears to offer what Federal Bank currently does not: valuation comfort alongside catch-up potential. Haldar said he sees the stock moving to Rs 245-250 from current levels, making it a more compelling candidate for investors seeking fresh exposure in the segment.

The takeaway for investors is nuanced but important. Federal Bank may still be a hold for those already invested, but for new money, Haldar’s call suggests the smarter trade may lie in a private bank where the rally is less mature and upside appears more open-ended.