IDFC First Bank Ltd. share price target

IDFC First Bank’s (IDFCFB) FY23 annual report titled ‘Robust foundation, responsible progress’ fairly captures the theme of ongoing transformation of the bank and way ahead. Segmental profitability disclosures suggest sharp turnaround in the retail business with calculated RoA around 1.15% for FY23 vs -1.1% in FY22 and -2.6% in FY21.

IDFC First Bank (IDFCFB) has once again reported strong quarterly earnings in Q1FY24 with PAT at INR 7.65bn, (up 61% YoY; in line with our estimates) driven by strong loan growth and moderating cost-income leading to rising core RoA, while net NPAs are down QoQ for the 8th consecutive quarter. The bank has delivered over 1% RoA and >24% YoY loan growth for the 4th consecutive quarter, suggesting strong execution.

We revise our rating from BUY to HOLD on the stock.

We maintain our BUY recommendation on the stock.

Quarterly Update Q4FY23

IDFC FIRST Bank (IDFCFB) reported strong core RoA at 1.23% in Q4FY23, driven by continued strong business growth, NIM uptick and improving asset quality though core cost-to-income ratio (C/I) remained flattish QoQ.