Federal Bank shares hit record high, overbought on charts; what's next?

Shares of Federal Bank hit their record high on Monday after global brokerage UBS raised its price target to Rs 310 from Rs 250 earlier. The fresh price target is 18.8% higher from Friday's closing levels. UBS maintained its "buy" rating on the stock.

Rising for the fourth straight session, Federal Bank shares hit a record high of Rs 264.20 on Monday against the previous close of Rs 261.55. Rekha Rakesh Jhunjhunwala, wife of late investor Rakesh Jhunjhunwala, held 5.90 crore shares or 2.42 per cent stake in the private lender at the end of September 2025 quarter.

Market cap of the bank stood at Rs 65,087 crore. Total 1.23 lakh shares of the bank changed hands amounting to turnover of Rs 3.23 crore on BSE.

In terms of technicals, the relative strength index (RSI) of the stock stands at 74.9, signaling the stock is trading in the overbought zone. Federal Bank shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Rajesh Palviya, SVP of Research at Axis Securities has a buy call on the banking stock with a price target of Rs 275. Stop Loss can be fixed  at Rs 245. 

"Federal Bank is in a strong uptrend, forming a series of higher tops and bottoms formation. High volumes in this rally signify increased participation. It is well placed above its 20, 50, 100 and 200-day SMA, and these averages are also inching up along with rising averages, which reconfirms bullish sentiments. The weekly and monthly strength indicator, RSI, is in favourable territory, indicating rising strength across all time frames. Investors should consider buying, holding, and accumulating this stock. Its expected upside is Rs 267-275, and its downside support zone is at Rs 255-250 levels," said Palviya. 

Global brokerage UBS believes that an improvement in Federal Bank's operating trends is likely to accelerate in the medium term for the lender.

Federal Bank's credit costs, which slipped 15 basis points in the second quarter, are likely to remain stable, while near-term growth, margins are expected to be subdued due to the continued balance sheet rationalisation and the RBI's recent interest rate cut by 25 basis points, according to the brokerage.

Federal Bank reported a 9.6 percent year-on-year fall in standalone net profit to Rs 955.3 crore for the July-September quarter (Q2 FY26). Net interest income (NII) climbed 5.4 percent on-year to a record Rs 2,495 crore, led by stable margins and steady loan growth. Federal Bank’s asset quality improved improved, with gross non-performing assets (GNPA) falling to 1.83 percent from 2.09 percent a year ago, and net NPAs at 0.48 percent against 0.57 percent.