IDFC First Bank Share price : Shares of IDFC First Bank have made a huge jump of more than 9 percent on the basis of excellent quarterly results. The bank’s profit has crossed Rs 1000 crore for the first time, which is more than double compared to the same period last year. With this, there has been a big improvement in the asset quality of the bank. NPA has reached its lowest level ever. After this strong performance, all the leading brokerage houses of the market seem to be very enthusiastic about this stock and have increased its target price significantly.
new record of profits
The real strength of any bank lies in its earnings and margins. According to Sudhanshu Jain, CFO of IDFC First Bank, the first quarter of the current financial year has proved to be historic for the bank. The return on assets (RoA) of the bank has become 1.06 percent. The management aims to keep it around 1 percent in the future. The bank’s core net interest margins (NIMs) have also increased by 20 basis points on a quarterly basis, taking it to 5.9 percent. Apart from this, the credit cost i.e. the cost of lending is continuously declining, which is a big indication of the healthy financial structure of the bank.
tremendous improvement in performance
It is important for the investor to understand in which direction the main business of the bank is going. The CFO has expressed confidence that the bank’s deposit and loan growth is expected to be more than 20 percent in the coming times. There has been an increase of 18 percent in deposits on annual basis. At the same time, the CASA ratio of the bank has improved by about 300 basis points to 51 percent, which is considered to be the best in the entire banking industry. The micro finance (MFI) segment of the bank, which was facing some challenges earlier, has now become completely stable. A strong growth of 15 to 20 percent is expected this year. The management is now rapidly increasing its focus on secured loans, business banking and mortgage segments.
Brokerage house increased the target
Seeing these excellent results, stock market experts have also become quite bullish on this stock. Recently, after the controversy regarding Chandigarh/Haryana case, the share price had fallen significantly, due to which its current valuations have now become very attractive for investors. Foreign brokerage firm CLSA has upgraded the rating of this stock from ‘Hold’ to ‘Outperform’. He has increased its target price from Rs 73 to Rs 95. Similarly, Nomura has also increased its target to Rs 95.
The biggest target for this stock in the market has come from Investec. Investec has increased its target price from Rs 96 to Rs 115. Improving asset quality of the bank, falling credit cost and continuously increasing growth are making this stock an excellent option for long term investment.
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