DCB Bank stock surges 14% after strong Q2 results; IDFC First Bank gains 6% on strong earnings growth

Brokerages gave favourable views on DCB Bank for its sharp reduction in credit costs, steady improvement in margins, and focus on operational efficiency and asset quality; and on IDFC First Bank for its strong profit growth, easing microfinance stress, stable asset quality, and improving operating leverage.

Shaleen Agrawal

October 20, 2025 / 12:43 IST

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26 Aug, 2025 12:21

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Shares of DCB Bank Ltd and IDFC First Bank Ltd rose sharply on Monday following their July-September quarter (Q2 FY26) results, which showed profit growth and steady asset quality. DCB Bank jumped nearly 14 percent, marking its biggest single-day gain since April 2022, while IDFC First Bank gained over 6 percent.

DCB Bank shares jump on earnings beat and lower credit costs

DCB Bank’s share price surged 13.85 percent to Rs 146.90 after strong operational metrics and lower credit costs drew positive brokerage reactions. The lender reported a 19 percent year-on-year rise in net profit to Rs 184 crore for Q2 FY26.

Net interest income (NII) grew 17 percent to Rs 596 crore from Rs 509 crore a year earlier, with net interest margin (NIM) improving to 3.23 percent. Credit costs fell sharply to 0.31 percent from 0.59 percent in the June quarter, while asset quality improved slightly, with gross NPA at 2.91 percent and net NPA at 1.21 percent.

Brokerages viewed the performance positively. Analysts at Anand Rathi Research said the bank’s emphasis on operational efficiency, asset quality and diversified income streams positions it favourably for sustained growth and profitability. Dolat Capital noted that slippages excluding gold loans stood at 2.5 percent and that reducing this to 2 percent would aid operating expenses. According to Reuters, the stock holds a “Strong Buy” rating, with a median price target of Rs 167 based on LSEG data.

IDFC First Bank rises after 75% profit growth, stable asset quality

IDFC First Bank’s share price rose 6 percent to Rs 76.20 after brokerages highlighted strong profit growth and improving operating leverage. The lender’s net profit jumped 75.5 percent year-on-year to Rs 352.3 crore for Q2 FY26.

Net interest income (NII) increased 6.8 percent to Rs 5,113 crore, while total interest income rose nearly 11 percent to Rs 9,936.8 crore. Asset quality remained stable, with gross NPA at 1.86 percent and net NPA at 0.52 percent.

Brokerages maintained a positive stance. Jefferies reiterated its buy rating while raising the price target to Rs 85 from Rs 82, citing sequential reduction in microfinance slippages, stable asset quality, and healthy growth in loans and deposits. Emkay Global reiterated its add rating, expecting asset quality recovery to accelerate in the second half of FY26, while Centrum said earnings improvement is in sight. According to Reuters, the stock carries an average “buy” rating from 18 analysts, with a median price target of Rs 80 based on LSEG data.