IDFC First Bank Ltd. share price target

We revise our rating from HOLD to BUY

IDFC First Bank (IDFCFB) reported broadly in-line set of numbers with Q1FY26 PAT of INR 4.6bn and RoA rising to ~50bps. Higher-than-expected slippages and credit costs were offset by strong treasury gains.

We recommend a BUY on the stock with a target price of Rs 85/share, implying an upside of 10% from the CMP

Quarterly Update Q4FY25

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