IDFC First Bank Ltd. share price target

PAT beat estimates, aided by higher non-interest income and lower operating expenses

We maintain our HOLD recommendation on the stock.

IDFC First Bank (IDFCFB) reported 4QFY25 PAT of INR3.04b (58% YoY decline, 6% beat to MOFSLe) amid lower tax expense. NII grew 10% YoY/ flat QoQ to INR49.1b (in line). NIMs contracted 9bp QoQ to 5.95% (in line), dragged by a decline in the MFI business.

Despite healthy balance sheet growth, higher provisioning led to a 58% y/y fall in IDFC First Bank’s PAT. Microfinance credit costs have peaked for the year. We value the bank at 1.2x FY27e PBV and retain a
Buy rating, primarily led by the higher balance sheet growth, strong NIM and improving operating leverage.

We upgrade IDFC First Bank (IDFCFB) to BUY with a revised TP of INR 75, as the large proposed capital infusion (INR 75bn) improves visibility on superior loan growth/operating leverage (without any material dilution in book value) topped with inexpensive valuations.

Capital raise eases adequacy, but NPA pressures persist

Target 2.0 is a challenge given NPAs and capital adequacy constraints

Earnings lower on account of higher slippages, moderate loan book growth

We maintain our HOLD recommendation on the stock.

IDFC First Bank (IDFCFB) reported a 3QFY25 PAT of INR3.4b (53% YoY decline, 32% miss to MOFSLe) due to an increase in opex (5% vs. our est) and elevated provisions.

Quarterly Update Q2FY25

We downgrade the stock to HOLD from BUY earlier.

IDFC First Bank (IDFCFB) reported 2QFY25 PAT of INR2b (73% YoY decline, significant miss to MOFSLe) due to a spike in provisions.

Quarterly Update Q1FY25

We maintain our BUY recommendation on the stock.

IDFC First Bank (IBFCFB) has reported a broadly in-line set of numbers with strong business growth and better cost income, though higher credit costs (as guided) weighed on PAT (INR 6.8bn) and RoA (down 12bps QoQ to 91bps).

IDFC First Bank (IDFCFB) reported a 1QFY25 PAT of INR6.8b (-11% YoY, in line) dragged down by elevated provisions.

We upgrade IDFC First Bank (IDFCFB) to BUY (from Hold) as we see the near-term (H1FY25) stagnation in the costincome ratio/rise in credit costs likely being outweighed by industry-leading deposits/loan/PAT growth.