Brokerage Motilal Oswal downgraded the stock to neutral with a revised target price of Rs 95 following its September quarter earnings on Saturday. IDFC First Bank stock has delivered a 60% return since it initiated coverage in October 2022. “Post sharp outperformance over the past one year the stock now offers a limited upside to our revised fair value,” Motilal Oswal opined.
IDFC First Bank on Saturday reported a net profit of Rs 751 crore for the quarter ended September 30 which was up 35% year-on-year versus Rs 556 crore reported by the company in the corresponding quarter of the previous financial year.
The standalone core operating profit grew 38% YOY from Rs 1,052 crore in Q2FY23 to Rs 1,456 crore for Q2FY24. The net interest income (NII) grew 32% YoY from Rs 3,002 crore in Q2FY23 to Rs 3,950 crore in Q2FY24.
The net interest margin was 6.32% in Q2FY24 as compared to 5.83% in Q2FY23 and 6.33% in Q1FY24.
The fee and other income grew by 46% YoY from Rs 945 crore in Q2FY23 to Rs 1,376 crore in Q2FY24. The retail fees constitute 93% of the overall fees for the quarter Q2FY24.
The consolidated net profit was up over 2% quarter on quarter. The private lender had reported a profit after tax (PAT) of Rs 731.51 crore in the June ended quarter.Core Operating income grew 35% from Rs 3,947 crore in Q2FY23 to Rs 5,326 crore in the reporting quarter. Operating expense grew by 34% YoY from Rs 2,895 crore in Q2FY23 to Rs 3,870 crore in Q2FY24.
Provisions increased 25% YoY from Rs 424 crore in Q2FY23 to Rs 528 crore in Q2FY24. Annualised RoA improved from 1.07% in Q2FY23 to 1.16% in Q2FY24.
Annualised RoE improved from 10.13% in Q2FY23 to 11.03% in Q2FY24. Customer deposits increased by 44% YoY from Rs 114,004 crore as of September 30, 2022 to Rs 164,726 crore as of September 30, 2023.
CASA deposits grew by 26% YoY from Rs 63,305 crore as of September 30, 2022 to Rs 79,468 crore as of September 30, 2023. CASA Ratio stood at 46.4% as of September 30, 2023. Retail deposits grew by 50% YoY from Rs 84,859 crore as of September 30, 2022 to Rs 1,27,595 crore as of September 30, 2023.
Legacy high cost borrowings reduced from Rs 20,449 crore as of September 30, 2022, to Rs 15,002 crore as of September 30, 2023.
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