IDFC First Bank shares crash 9% after reporting 73% fall in Q2 net profit

Motilal Oswal reiterated its 'neutral' call on the bank, and kept its price target of Rs 73 per share intact.

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26 Aug, 2025 12:21

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Private sector lender IDFC First Bank saw its shares crack over 9 percent in the morning session on October 28, after the bank reported a 73 percent decline in its September quarter standalone net profit.

IDFC First Bank reported a net profit at Rs 200.7 crore compared to Rs 751 crore reported by it in the year ago period. The Net Interest Income (NII) increased 21 percent to Rs 4,788 crore in Q2FY25 versus Rs 3,950 crore in the year ago period.

At 9.15 am, shares of IDFC First Bank were quoting Rs 59.79 on the NSE, lower by 8.9 percent.

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Provisions for Q2 FY25 stood at Rs 1,732 crore, primarily on account of prudent provisioning buffer of Rs 568 crore, the bank said in a statement.

Net Interest Income (NII) improved to Rs 4,788 crore, from Rs 3,950 crore in the second quarter of the previous year. As regards asset quality, the bank witnessed improvement with gross Non-Performing Assets (NPAs) declining to 1.92 per cent of the gross loans by the end of September 2024 from 2.11 per cent a year ago.

Similarly, net NPAs or bad loans moderated to 0.48 per cent from 0.68 per cent at the end of the second quarter of the previous fiscal.

"While the MFI asset quality deteriorated, SMA in other segments—including PL and CC—is tracking better than industry data, and improved QoQ," noted Nuvama Institutional Equities.  The brokerage retained its 'add' rating, but cut its target price on the player to Rs 60, down from Rs 72 per share.

"IDFC First Bank's NIM moderated 4 bps QoQ, though opex was in line with our expectations; this led to a slight easing in the C/I ratio. On the business front, deposit traction continued to remain robust, while CASA mix also witnessed an improvement," said Motilal Oswal.

"Advances growth also remained healthy, led by steady traction across Retail, SME, and Corporate finance. We estimate the C/I ratio to moderate gradually to ~66 percent by FY27 while it may remain elevated in the near term, primarily due to the need to mobilize deposits at a healthy run rate to further bring down the CD ratio," added the brokerage.

Motilal Oswal reiterated its 'neutral' call on the bank, and kept its price target of Rs 73 per share intact.

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