Federal Bank Q3 FY26 results due this week; have Jhunjhunwala stock in portfolio?

Federal Bank Q3 FY26 Results Preview: Federal Bank is expected to stage a largely steady financial performance, with the private sector lender due to report its quarterly earnings on Friday, January 16. Analysts expect the bank to register mild gains in its top and bottom lines along with stable asset quality.

According to Zee Business research, Federal Bank is estimated to log a 3.7 per cent year-on-year increase in its net interest income (NII) to Rs 2,520 crore for the quarter ended December 31. NII — the difference between interest earned and interest paid — is a key measure of revenue for banks.

The analysts peg Federal Bank’s net profit for the October-December period at Rs 970 crore, translating to 1.5 per cent growth over the year-ago period.

According to the research, Federal Bank is estimated to register an 11 per cent rise in deposits and 8.8 per cent growth in loans.

Rivals HDFC Bank and ICICI Bank are scheduled to report its financial results on Saturday, January 17.

Analysts expect Federal Bank’s asset quality — measured as a percentage of troubled loans in total loans — to remain steady in comparison to the previous three months (July-September).

Zee Business analysts expect the bank’s gross non-performing assets (NPAs) — also known as gross bad loans — to remain at 1.8 per cent of total loans.

They peg Federal Bank’s net non-performing assets — or net bad loans — at 0.5 per cent for the December quarter, unchanged from the previous three months.

Analysts also expect it to stage a recovery in interest income. However, they have cautioned investors about provisions and credit costs causing margin pressure.

Investors will track the bank’s quarterly numbers closely for slippages — or fresh bad loans.

In Q2, Federal Bank’s slippage ratio worsened to 0.94 per cent from 0.79 per cent in the corresponding period a year ago.

Slippage ratio refers to the rate at which a bank’s standard loan turns into a non-performing asset (NPA).

Typically, a higher slippage rate signals worsening financial health for banks and other commercial lenders, and vice versa.

On Tuesday, Federal Bank shares declined 0.9 per cent to close at Rs 246.9.

At this level, the stock — part of the Nifty Bank — has risen more than 27 per cent in a year, outperforming gains of 11.6 per cent and 22.1 per cent in the Nifty50 and Nifty Bank gauges, respectively.

In 2025, Federal Bank shares rewarded investors with a return of 33.5 per cent.