Shares of IDFC First Bank have surged 53% from their 52-week low in a year. The banking stock, which fell to a 52-week low of Rs 53.90 on April 17 last year was trading at Rs 82.79 in the current session. In comparison, the Bank Nifty has gained 14% in a year.
IDFC First Bank shares fell 1.96% to Rs 82.79 in early deals on Monday. Market cap of the bank slipped to Rs 58,489 crore. Total 33.75 lakh shares changed hands amounting to a turnover of Rs 27.87 crore on BSE. The banking stock has risen 53% in a year but lost 6% in 2024.
In terms of technicals, the relative strength index (RSI) of the banking stock stands at 64, signaling the stock is neither oversold nor overbought. IDFC First Bank shares are trading higher than the 10 day, 20 day, 30 day and 50 day but lower than the 5 day, 100 day, 150 day and 200 day moving averages.
Aditya Gaggar from Progressive shares expects the banking stock to hit a target of Rs 104 to Rs 124 in 6 to 9 months
Gaggar said consolidation of over 7 months comes to an end with a Bullish Flag and Pole Formation breakout. "Leading indicator RSI confirms price movement with a falling trendline breakout as well as hidden bullish divergence. +DMI has crossed –DMI which is a positive sign and a reading of 21 indicates the beginning of a strong trend. MACD is on the verge of giving a positive crossover," he added citing the rationale behind his bullish outlook for the banking stock.
Global brokerage Jefferies has initiated coverage on the private sector lender with a 'buy' call and a target price of Rs 100.
"IDFC First Bank has built a well-rounded platform, arguably among the most improved deposit franchises. Operational efficiencies will play out from H2FY25, and over FY24-27 strong deposit growth will aid loan growth that should aid 28 percent EPS CAGR even as credit costs rise. Improving ROA (to 1.5 percent) and ROE (to 14 percent) will aid rerating. A fall in rates should help it more than peers. The ability to raise capital will be key. We initiate coverage with a Buy rating and price target of Rs 100," said the brokerage.
The lender reported a 18% rise in net profit to Rs 715.68 crore in the December 2023 quarter, against Rs 605 crore recorded in Q3 FY23.
Gross non-performing assets (NPA fell to 2.04 per cent in Q3 against 2.96 per cent logged in Q3 FY23. The bank's net NPAs in Q3 stood at 0.68 per cent, rising from 1.03 per cent on a year-on-year basis.
Net interest income (NII) climbed 30 per cent to Rs 4,287 crore in the third quarter compared with Rs 3,286 crore in the same quarter of last year.