Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>The <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> and the <a href="https://www.smartkarma.com/entities/nse-nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">NSE Nifty Bank Index (NSEBANK INDEX EQUITY)</a> reached all-time highs on 26 September 2024 but have since declined.</li>
<li>Most stocks in the Bank Index have fallen below their 200 and 50 day moving average,. Volatilities have gone up, but trade cheap when compared to historical levels.</li>
<li>Opportunities present themselves either in stocks that stayed resilient during the downturn (<a href="https://www.smartkarma.com/entities/federal-bank-ltd" target="_blank" data-smartkarma-citation="entities:11784:1" rel="noopener">Federal Bank (FB IN)),</a>or fell and gained in implied volatility. A long-short strategy might also be considered.</li>
</ul>


The NIFTY Index (NIFTY INDEX) and the NSE Nifty Bank Index (NSEBANK INDEX EQUITY) reached all-time highs on 26 September 2024 but have since declined.
Most stocks in the Bank Index have fallen below their 200 and 50 day moving average,. Volatilities have gone up, but trade cheap when compared to historical levels.
Opportunities present themselves either in stocks that stayed resilient during the downturn (Federal Bank (FB IN)),or fell and gained in implied volatility. A long-short strategy might also be considered.


EQD | Nifty Banks – Single Stock Options and Relative Value Opportunities

Global Equities, Multi-Asset PM, Dantes Outlook

Damanick Dantes, CMT

Global Equities, Multi-Asset PM

Dantes Outlook

We invest over a full market cycle, using multi-asset portfolios tailored to each global client, from individuals to family offices.

Built to Endure

Cross Asset Strategy

<ul>
<li>
India reversed its entire relative gain against EM. The near 50% relative drawdown is the deepest and longest since 2012, so we're positioning for improvement.</li>
<li>
Bottom-Decile losses in India have historically preceded strong rebounds. Although relative washouts offer no comparable evidence. We can scale up on an absoute basis.</li>
<li>
Opportunity in the middle of the index. We built a tiered watch list from the middle cohort, scaling toward equal weight as confirmation arrives.</li>
</ul>



India reversed its entire relative gain against EM. The near 50% relative drawdown is the deepest and longest since 2012, so we're positioning for improvement.

Bottom-Decile losses in India have historically preceded strong rebounds. Although relative washouts offer no comparable evidence. We can scale up on an absoute basis.

Opportunity in the middle of the index. We built a tiered watch list from the middle cohort, scaling toward equal weight as confirmation arrives.


India Equities: Stocks to Watch After Deep Underperformance

Market & Forensics Analyst, Beat the Street

Nimish Maheshwari

Market & Forensics Analyst

Beat the Street

Beat The Street was founded by Nimish Maheshwari and Sudarshan Bhandari, both of whom are Chartered Accountants by Profession, known for their expert analysis in the fields of Business, Sectoral analysis, and Corporate governance.

With a strong social media presence of 45,000+ Subscribers across various platforms, they are considered trusted voices in the industry. Their insights and analysis have been featured in some of India’s most prominent publications, including the Economic Times, Dalal Street Investment Journal, The Morning Context, and The Ken.

Their analysis on Bankrupt & Insolvent companies has been instrumental in saving investors from significant losses. They have a keen eye for identifying red flags and has identified exclusive redflags earlier in Vedanta, Nykaa, Dhani Services, Adani and many more.

Read Business Not Stock Prices

Thematic (Sector/Industry)

<ul>
<li>PSU bank credit growth exceeded private-bank growth in FY25 for the first time in more than a decade. Between FY22-FY26, private-bank share fell 14.5 percentage points in home-loans.</li>
<li>Asset quality has converged sharply. Competitive advantage is moving from provisioning relief to funding, pricing, distribution and the ability to deploy capital at an acceptable return.</li>
<li>The sector trade is no longer simply “private quality versus PSU risk.” One must distinguish volume share, absolute profit share, sustainable ROA and the valuation paid for each.</li>
</ul>


PSU bank credit growth exceeded private-bank growth in FY25 for the first time in more than a decade. Between FY22-FY26, private-bank share fell 14.5 percentage points in home-loans.
Asset quality has converged sharply. Competitive advantage is moving from provisioning relief to funding, pricing, distribution and the ability to deploy capital at an acceptable return.
The sector trade is no longer simply “private quality versus PSU risk.” One must distinguish volume share, absolute profit share, sustainable ROA and the valuation paid for each.


Why Indian Private Sector Large Cap Banks Are Not Performing?

India Equity Analyst - Fundamental & Thematic, Beat the Street

Sudarshan Bhandari

India Equity Analyst - Fundamental & Thematic

Equity Bottom-Up

<ul>
<li>Blackstone has announced a INR 6,197 crore preferential capital infusion in Federal Bank, acquiring up to a 10% stake through convertible warrants, a landmark deal in India’s mid-sized banking space.</li>
<li>This investment boosts Federal Bank’s capital by 200–250 bps, enabling growth in high-yield segments while maintaining financial stability, reflecting growing global investor confidence in India’s private banks.</li>
<li>The capital infusion strengthens Federal Bank’s earnings prospects, with a projected 29% CAGR from FY26–28E, margin growth, and improved RoA reaching 1.35% by FY28E.</li>
</ul>


Blackstone has announced a INR 6,197 crore preferential capital infusion in Federal Bank, acquiring up to a 10% stake through convertible warrants, a landmark deal in India’s mid-sized banking space.
This investment boosts Federal Bank’s capital by 200–250 bps, enabling growth in high-yield segments while maintaining financial stability, reflecting growing global investor confidence in India’s private banks.
The capital infusion strengthens Federal Bank’s earnings prospects, with a projected 29% CAGR from FY26–28E, margin growth, and improved RoA reaching 1.35% by FY28E.


Blackstone Boosts Federal Bank’s Capital: Strengthening CET-1 for Future Growth

<ul>
<li>Federal Bank delivered record net interest income (NII) and fee income in Q2 FY26, while net profit fell ~9½ % YoY. </li>
<li>Core earnings momentum is intact—CASA growth, margin uptick, asset quality improving—but elevated provisions and subdued credit growth raise questions on earnings durability.</li>
<li>He bank is executing on key levers, but investors need clarity on the earnings runway and capital/deposit growth ahead—read on for the deeper dive.</li>
</ul>


Federal Bank delivered record net interest income (NII) and fee income in Q2 FY26, while net profit fell ~9½ % YoY. 
Core earnings momentum is intact—CASA growth, margin uptick, asset quality improving—but elevated provisions and subdued credit growth raise questions on earnings durability.
He bank is executing on key levers, but investors need clarity on the earnings runway and capital/deposit growth ahead—read on for the deeper dive.


Federal Bank Q2 FY26: Strong Operational Beat, RoA Strategy On Track - But Is the Re-Rating Done

India

Federal Bank is a major Indian private sector commercial bank offering a comprehensive suite of banking and financial services, including retail banking, wholesale banking, and treasury operations. It provides products such as savings and current accounts, loans, credit and debit cards, insurance, and wealth management. The bank is headquartered in Aluva, Kochi, Kerala, India, and was founded on April 23, 1931.

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Federal Bank (FB IN)

EQD | Nifty Banks – Single Stock Options and Relative Value Opportunities

The NSE Nifty Bank Index hit a record high in September 2024 but has since dropped. Option opportunities are found in resilient or volatile bank...

Gaudenz Schneider

India Equities: Stocks to Watch After Deep Underperformance

India looks attractive after a historic washout. We prefer to position among leaders in the middle of the index, scaling up as breadth improves....

Damanick Dantes, CMT

Why Indian Private Sector Large Cap Banks Are Not Performing?

Public-sector banks are using lower lending rates to win prime credit. The pressure on private banks is no longer about bad loans; it is about...

Nimish Maheshwari

Blackstone Boosts Federal Bank’s Capital: Strengthening CET-1 for Future Growth

Blackstone invests INR 6,197 crore in Federal Bank, acquiring up to 10% stake, boosting capital by 200-250 bps for growth in high-yield segments...

Sudarshan Bhandari

Federal Bank Q2 FY26: Strong Operational Beat, RoA Strategy On Track - But Is the Re-Rating Done

Federal Bank's Q2 FY26 results show strong core earnings momentum, but questions remain on earnings durability due to elevated provisions and...

Nimish Maheshwari

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

EQD | Nifty Banks – Single Stock Options and Relative Value Opportunities

The NSE Nifty Bank Index hit a record high in September 2024 but has since dropped. Option opportunities are found in resilient or volatile bank...

Gaudenz Schneider

India Equities: Stocks to Watch After Deep Underperformance

India looks attractive after a historic washout. We prefer to position among leaders in the middle of the index, scaling up as breadth improves....

Damanick Dantes, CMT

Why Indian Private Sector Large Cap Banks Are Not Performing?

Public-sector banks are using lower lending rates to win prime credit. The pressure on private banks is no longer about bad loans; it is about...

Nimish Maheshwari

Blackstone Boosts Federal Bank’s Capital: Strengthening CET-1 for Future Growth

​Blackstone invests INR 6,197 crore in Federal Bank, acquiring up to 10% stake, boosting capital by 200-250 bps for growth in high-yield segments...

Sudarshan Bhandari

Federal Bank Q2 FY26: Strong Operational Beat, RoA Strategy On Track - But Is the Re-Rating Done

​Federal Bank's Q2 FY26 results show strong core earnings momentum, but questions remain on earnings durability due to elevated provisions and...

Nimish Maheshwari

Blackstone invests INR 6,197 crore in Federal Bank, acquiring up to 10% stake, boosting capital by 200-250 bps for growth in high-yield segments...

Federal Bank's Q2 FY26 results show strong core earnings momentum, but questions remain on earnings durability due to elevated provisions and...