Indian Hotels Company (IHCL), Federal Bank, and Coforge from the BSE Midcap index achieved record highs during Tuesday’s intra-day trading, rallying up to 5 per cent on the back of a strong surge in the equity markets. The broader BSE Sensex climbed by 1.4 per cent or 1,078 points, reaching 78,418 at 11:39 AM.
Federal Bank Leads with Strong Earnings Expectations
Federal Bank’s stock soared 5 per cent to hit a fresh peak of ₹210.50, driven by optimistic earnings projections. Analysts attributed this performance to the bank’s steady growth trajectory, which it has maintained even in a challenging operational environment.
In the September quarter (Q2 FY25), the private-sector lender showcased resilience, with improved key metrics such as robust asset quality and controlled expenses. Federal Bank’s gross non-performing assets (GNPA) and net NPA ratios improved to 2.1 per cent and 0.7 per cent, respectively. Analysts credit this to its strategic customer selection and prudent underwriting practices, which extend to its co-lending partnerships.
According to Motilal Oswal, the bank achieved a 20 per cent compound annual growth rate (CAGR) in its loan book and 18 per cent CAGR in deposits between FY22 and FY24. While it faced net interest margin (NIM) pressures due to rising funding costs, Federal Bank demonstrated strong recovery strategies and effective risk management.
Looking ahead, analysts project an 18 per cent loan CAGR over FY25-27, supported by fintech partnerships and enhanced scalability under a revamped management. Motilal Oswal reaffirmed its “Buy” rating, setting a target price of ₹230, suggesting further upside potential.
IHCL Benefits from Strong Demand Underpinning
Shares of Indian Hotels Company Limited (IHCL) rose by 2.5 per cent to ₹755.60, continuing a 13 per cent two-week rally following its stellar Q2FY25 performance. The company maintained its double-digit revenue growth guidance for FY25, buoyed by robust new business performance, healthy same-store growth, and increased revenue from its consolidated hotel segment.
In October, the hotel segment reported a 16.5 per cent revenue growth, with expectations of accelerated momentum through Q3. The company plans to open 25 new hotels in FY25, adding to its industry-leading portfolio. Additionally, its flagship Taj brand is benefiting from limited competitive supply in key micro-markets across India.
Elara Capital revised its stance on IHCL from “Sell” to “Accumulate,” increasing its target price to ₹795 from ₹519. Analysts highlighted IHCL’s ability to capitalise on the sustained demand undercurrent, positioning it as a prime beneficiary in the hospitality sector.
Coforge Rides High on Robust Growth Prospects
Coforge witnessed a 3 per cent intra-day surge, touching a record high of ₹8,236.95. Over the past six months, the IT services firm’s stock has skyrocketed 71 per cent, significantly outperforming the 6 per cent rise in the BSE Sensex during the same period.
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Coforge’s 12-month executable order book expanded to $1.3 billion, reflecting a remarkable 40 per cent year-on-year growth. This growth trajectory was bolstered by the addition of 13 new clients in Q2FY25, indicating strong market traction.
Analysts view Coforge’s strategic focus on improving operational efficiencies—such as optimising workforce structures and leveraging margin levers—as critical for sustaining growth. The firm’s earlier guidance of achieving $2 billion in revenue in the medium term remains on track, with the acquisition of Cigniti further strengthening its capabilities.
While analysts noted potential headwinds from seasonal furloughs in Q3, these have already been accounted for in the company’s guidance. Coforge’s diverse growth across sectors and geographies positions it well for continued success.
Sectoral Trends and Market Outlook
The strong performances by Federal Bank, IHCL, and Coforge underscore broader optimism in the BSE Midcap index, driven by robust corporate strategies and positive earnings expectations. As these firms continue to deliver on their respective growth plans, investor confidence remains buoyant.
With Federal Bank leveraging its fintech partnerships, IHCL capitalising on demand recovery in the hospitality sector, and Coforge riding high on IT services growth, these companies are well-positioned to sustain their upward momentum amidst a favourable equity market backdrop.
