Siddharth Teli, banking analyst at CIMB told CNBC-TV18, "In context of IDFC becoming a bank, clearly quarterly numbers don’t really make so much sense. It was a reasonably okay set of numbers; net profits up 48 percent year-on-year (YoY) driven by very high trading gains. So, the key takeaway over here is that they have been providing very high – they have overall four percent of balance sheet as provisions at this point in time. So, it seems that the management is very keen on not taking any of the legacy issues as they migrate to banking platforms. So, that is the key thing to watch for."
"Clearly as they become a bank we have to see the transition because current account and savings account, the deposit franchisee formation will be a key thing to watch for and that will be the biggest challenge that they will face and that is something we will have to watch for. So at this point in time we have a hold rating on the stock," he said.
"It is very difficult to forecast near term RoEs for IDFC and hence at 1.4 times book our target price on the stock is Rs 166 and we maintain our hold rating on the stock."
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