Federal Bank

I agree that the points that @Elric makes are very relevant. Every investor has to evaluate the prospects of the stock in the manner in which he has suggested. This will give the much required confidence to buy and hold the stock over the long-term.

If you are looking for data points, there is a recent 'management meet update' research report by IndiaNivesh which evaluates Federal Bank. The report states thus:

"We continue to prefer private sector banking space and Federal Bank is one of the top pick in mid sized private sector banking space. We are positive on the bank due to its focus on SME / Retail which continues to do well for industry. While asset quality in corporate segment continues to remain watchful, retail and SME continues to do well. Further strong provision coverage ratio of 85% gives us more comfort. We expect 15% CAGR in earnings for Federal bank for FY15-17E and 14.5% ROE / 1.3% ROA. At CMP of Rs 135, Federal Bank is trading at P/ABV of 1.4x and 1.3x for FY16E and FY17E respectively. We continue to maintain BUY rating on Federal Bank with target price of Rs 175, 1.6x FY17E ABV. Significant deterioration in asset quality and Lower growth than anticipated remains the key risks."

The report is annexed.