Q1 impact: IDFC First Bank shares spike as lender returns to profit

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26 Aug, 2025 12:21

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Shares of IDFC First Bank zoomed over 13 percent intraday on August 1 after the lender reported better than expected numbers for the June quarter.

The lender on July 30 said its net profit grew to Rs 474 crore in Q1FY23 as against a net loss of Rs 630 crore in the same quarter last year. Its net interest income (NII) grew by 26 percent year-on-year (YoY) to Rs 2,751 crore. Net Interest Margin (NIM) improved to 5.89 percent from 5.50 percent.

At 11:23am, the scrip traded at Rs 42.55 apiece on the BSE, up 13.32 percent, while the benchmark Sensex was at 57,920.30, up 350.05 points or 0.61 percent.

IDFC First Bank's fee and other income grew by 100 percent YoY to reach Rs 899 crore while core operating income (excluding trading gains) grew by 39 percent YoY to Rs 3,650 crore. Core operating profit (excluding trading gains) grew 64 percent YoY and 18 percent sequentially to reach Rs 987 crore. Provisions other than tax were lower by 84 percent YoY to Rs 308 crore.

The lender's customer deposits grew by 21 percent YoY to reach Rs 1,02,868 crore while CASA ratio stood at 50.04 percent as of June 30, 2022.

Gross non performing assets (NPA) and net NPA stood at 3.36 percent and 1.30 percent of the assets respectively, which is a reduction of 125 bps YoY and 102 bps and QoQ reduction of 33 bps and 22 bps, respectively.

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“We have built a strong foundation for the bank, on the basis of which we can grow the loan book, deposits and profits comfortably from here on in a steady manner,” said V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank.

ICICI Direct said IDFC First stock performance was volatile in past year mainly due to concerns on growth and asset quality. However, healthy business growth, steady asset quality and gradual improvement in CI ratio should propel returns on equity (RoE).

The brokerage retained 'BUY' rating on the stock with target of Rs 50 per share.

ICICI Direct believes key triggers for the stock price will be core focus on retail loans and granular liabilities base and guidance of lower credit cost at 1.5 percent led by improved collections bode well for the earnings trajectory and, therefore, return ratios.

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