At CMP of Rs. 88, Federal Bank trades at an FY20E and FY21E P/B of 1.2x and 1.1x respectively as per Bloomberg consensus estimates. Federal Bank delivered a strong operational performance at a time that appeared challenging on account of Kerala floods and continued cleansing of the balance sheet. The Bank has maintained healthy levels of business growth and is well positioned to gain market share in both corporate and retail segments. Management has sounded confident to maintain gross slippages at Rs. 14-15bn for FY19 and aims to deliver an exit ROA of 1%. We advise investors to BUYthe stock.