Buy IDFC First Bank; target of Rs 34: ICICI Direct

ICICI Direct's research report on IDFC First Bank

IDFC First delivered a strong performance despite a challenging environment. Except moratorium in phase2 still high at 28%, the bank recorded an improvement on all parameters. The bank offered Morat 2 to 28% of its customers by value vs. 35% in Morat 1. Around 23% is in retail assets including rural portfolio and 35% is in the wholesale financing portfolio. Provision was at Rs 764 crore, including Rs 375 crore related to Covid-19 over and above Rs 225 crore done in Q4FY21.

Outlook

Thus, we value the bank at ~1.1x FY22E ABV with a revised target price of Rs 34. We maintain our BUY recommendation.