IDFC First Bank Ltd. share price target

Good quarter and future growth prospects intact. IDFC First Bank, founded by the merger of erstwhile IDFC Bank and erstwhile Capital First on December 18, 2018. At present, the bank's total number of branches stands at 523, with a total funded assets to the tune of around ~Rs.1,06,828cr. We value the bank at 1.3x Adj BVPS of FY22E and revise our rating...

NII increased 21.8% YoY, 2.1% QoQ to | 1660 crore on account of expansion in NIM, which increased 4 bps QoQ, 114 bps YoY to 4.57%. Other income declined 51.7% YoY. This de-growth can be attributed to 19% drop in fee income due to lower loan origination as a result of low business activity due to pandemic. The bank sold off entire exposure to one of the stressed HFC through secondary market transaction, booked a loss of | 463 crore in trading income and released existing provision of | 460 crore. PAT for the...

IDFC First Bank, founded by the merger of erstwhile IDFC Bank and erstwhile Capital First on December 18, 2018. At present, the bank's total number of branches stands at 503, with a total funded assets to the tune of around ~Rs1,04,050cr. We value the bank at 1.2x Adj BVPS of FY22E and revise our rating...

Quick Research Note

The bank offered Morat 2 to 28% of its customers by value vs. 35% in Morat 1. Around 23% is in retail assets including rural portfolio and 35% is in the wholesale financing portfolio. Provision was at | 764 crore, including | 375 crore related to Covid-19 over and above | 225 crore done in Q4FY21. Asset quality witnessed a strong sequential improvement with GNPA & NNPA ratio improving ~61 bps and ~43 bps to 1.99% and 0.51%, respectively. Gross NPA of the retail loan book was at 0.87% vs. 1.77% as of March 31, 2020 and net NPA percentage of the retail loan book of the bank...

IDFC First Bank's (IDFCFB) Q1FY21 PAT at Rs 0.9bn was aided by 38% YoY growth in NII, stable non-interest income and lower opex QoQ.

Core business intact, growth and asset portfolio concerns arise IDFC FIRST Bank reported another healthy set of quarterly earnings. NII increased by 38.4% YoY/4.0% QoQ to Rs 1,626 Cr, PPOP increased by 180% YoY/71.5% QoQ to Rs 892 Cr and Net Profit increased to Rs 94 Cr, against Rs 617 Cr loss in Q1FY20. Other income increased on account of treasury gains of the bank. The bank has taken provisions of Rs 764 Cr for...

IDFCFB's earnings performance of Rs935mn (PLe: Rs889mn) was broadly in line with expectations but was better on PPOP on back of better NII and treasury gains which helped to make an additional Rs3.75bn of COVID related provisions and now has Rs6bn (60bps of loans) of COVID provisions. Loans under moratorium has come off to 28% as compared to 45% in Q4FY20 (35% excl. Agri) with 23% in retail and 35% in wholesale book. Bank's retail drive continues to move ahead with strong SA growth of 24% QQ and Retail TDs up 10% QoQ replacing bulky deposits, while corporate book has continued...

Net Interest Income (NII) reported a growth of 13% on a YoY basis, and Net Interest Margin (NIM) improved to 4.24% in Q4FY20, compared to 3.86% in the previous quarter. Currently Gross/Net NPA stands at 2.60%/0.94% compared to 2.83%/1.23% in Q3FY20. Provision coverage ratio improved for the quarter to 64.53% compared to 57.34% in Q3FY20. We have lowered our advances growth estimates by 13% each for FY21E and FY22E due to Covid 19 pandemic....

The bank had earlier provided with a watch list comprising stressed exposures. Total exposure to this stressed pool has reduced by | 313 crore QoQ at | 3205 crore with provision cover of ~49%, being maintained. Apart from this, it has provided 50% for telecom exposure worth | 3244 crore. With continued focus on balance sheet restructuring funded asset remained broadly stable at | 107400 crore. Within the same, wholesale book, as targeted, de-grew ~11% QoQ to | 39388 crore (infrastructure exposure declined 5% QoQ, corporate fell 15% QOQ). Retail book continued to grow...