Motilal Oswal's research report on IDFC First Bank
IDFC First Bank (IDFCFB) reported broadly in-line PAT of INR7.2b(down10% YoY/up1.2% QoQ) in 4QFY24, amid elevated provisions andhigher opex.NII grew 24% YoY, led by healthy loan growth, while margins contracted7bp QoQ to 6.35%. Opex continued to grow at a higher pace of 29.4%YoY to INR44.5b, resulting in an elevated C/I ratio of 72.8% in 4QFY24.Gross advances rose 25.1% YoY and 6.1% QoQ, while net advances rose24.4% YoY and 4.9% QoQ. Deposits surged 39% YoY/10% QoQ, with CASA mix improving to 47.2% (up 40bp QoQ). C/D ratio thus eased to 97% (thefirst time below the 100% mark).
Outlook
We estimate the bank to deliver ~30% earnings CAGR over FY24-26,with RoA/RoE reaching to 1.3%/13.2% in FY26. Reiterate Neutral with a revised TP of INR88 (premised on 1.6x FY26E ABV).
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