Accumulate IDFC Bank; target of Rs 55: Prabhudas Lilladher

Prabhudas Lilladher's research report on IDFC Bank

IDFCBK's earnings were below estimates on back of hit from one-time additional provisioning of 3.1bn on review of stressed assets value and drag on spreads from traditional balance sheet items. Loan book growth was better with strong growth in retail segment (+1x in many segments) and de-risking from running down infrastructure book. Stressed assets continued to be stable but bank added additional provisioning to improve the PCR.

Outlook

Bank's retail franchise is gathering pace and bank plans to double the assets and improve CASA but spreads improvement being muted and higher opex, PPOP growth will remain muted and hence we retain Accumulate with TP of Rs55 based on 1.3x Mar-20 ABV (rolled from Sep-19 ABV). For all recommendations report, click here

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