IDFC First Bank stock rises 6% on Investec's upgrade, check details
Shares of IDFC First Bank rose 6% in the afternoon session on Tuesday as brokerage firm Investec turned bullish on the stock. The firm raised rating of the Mumbai-based private lender to "buy" and raised its price target from Rs 65 to Rs 90. The fresh price target implies an upside potential of 23.55% from its previous close at Rs 72.84. The optimism stems from a projected Compounded Annual Growth Rate (CAGR) of 29% in Core Pre-Provisioning Operating Profit (PPoP) between financial years 2025 and 2028, bolstered by an 80 basis points cut in cost-to-assets and a 90 basis points drop in credit costs during the same period. The bank's return on assets (RoA) is expected to rise to 1.3% by 2028, from 0.5% last year.
IDFC First Bank rose 6% to Rs 77.20 on Tuesday against the previous close of Rs 72.82 on BSE. Total 92.04 lakh shares of the firm changed hands amounting to a turnover of Rs 70 crore. Market cap of the firm climbed to Rs 56,650 crore on BSE.
IDFC First Bank stock fell 5% in a year and gained 20 per cent in six months.
Investec noted the bank's strong pace of 'realisation' across both assets and liabilities, though it is not yet evident at the headline level. The brokerage remains optimistic about the bank's earnings-per-share growth trajectory. Competitors in the market, such as HDFC Bank and ICICI Bank, continue to be key players in the sector. Looking forward, the bank's strategy to optimise cost structures and credit costs is viewed favourably, providing a solid foundation for future growth and stability in the face of market challenges.
IDFC First Bank's March quarter net profit declined 58% to Rs 304.1 crore from Rs 724.3 crore in the previous fiscal. It was also below Street estimates of Rs 359.6 crore.
Its net interest margin stood at Rs 4,907.1 crore, up 9.8% from the previous fiscal's Rs 4,468.9 crore. However, it was lower than Street expectations of Rs 5,080.2 crore. In Q4 FY25, net interest income (NII) grew by 9.8% year-on-year to Rs 4,907 crore.
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