This Jhunjhunwala stock is in short-term uptrend, is the upside capped?

Shares of Federal Bank are in a short-term uptrend. The banking stock has gained 11% in a week, hitting its record high of Rs 280.20 on January 19. The Jhunjhunwala stock clocked 28.20% returns in six months and gained 41.66% in a year. It zoomed 102% in two years and 257% in five years. 

The recent rally in the stock also comes after the lender announced its Q3 earnings. The lender reported a 9% rise in net profit to Rs 1,041 crore in Q3 compared to Rs 955 crore in the corresponding quarter of the previous year. 

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 December 2025 quarter.

In the current session, the banking stock was trading on a flat note at Rs  272.35. Market cap of the bank stood at Rs 67,034 crore. Total 1.25 lakh shares of the bank changed hands amounting to turnover of Rs 3.40 crore on BSE.

Recently, global brokerage UBS raised its price target to Rs 310 from Rs 250 earlier. 

In terms of technicals, the relative strength index (RSI) of the stock stands at 61, signaling the stock is trading neither in the overbought nor in the oversold zone. 

Federal Bank shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Federal Bank price targets, outlook

Axis Direct has assigned a price target of Rs 320 on the banking stock post Q3 earnings. 

The brokerage expects NIMs to improve to 3.3-3.4% over FY27–28 from 3.1% in FY26E and remain a key RoA improvement driver.

"We expect Federal Bank's RoA improvement to 1.3–1.4% over FY27–28E vs. a rather lacklustre 1.1% in FY26E, supported by (1) healthy risk-adjusted credit growth, (2) margin improvement levers playing out with portfolio mix shift towards better-yielding segments and lower CoF, (3) strong deposit franchise with improving CASA mix, (4) strengthened fee income profile, and (5) stable asset quality metrics keeping credit costs under control. We prefer Federal Bank among the mid-sized banks, given clear visibility around RoA improvement," said Axis Direct.

Systematix Institutional Equities upgraded the stock to a 'Buy' from its earlier 'Hold' stance post Q3 earnings. 

The brokerage also revised its estimates to factor in better growth and margin scope, raising the target price to Rs 310 on Federal Bank stock from Rs 275 previously. 

Systematix said that the bank's sequential improvement was driven by improved margins and lower provisions. The Net Interest Margins (NIMs) for the quarter stood at 3.18%, expanding by 12 basis points (bps) quarter-on-quarter (QoQ) and 7 bps year-on-year (YoY).