IDFC First Bank Q4 Results Review - Elevated CTI Level Disappoints: Centrum Broking

Centrum Broking Report

IDFC First Bank Ltd. reported Q4 FY24 numbers which disappointed on high opex front. Net interest income for the quarter came in line at Rs 44.7 billion (up +24%/+4% YoY/QoQ).

However, opex came in higher at Rs 44.5 billion (up +30%/5.4% YoY/QoQ). Resultantly, CTI for the quarter and FY24 remained sticky at 72.7% and 72.1% (up 80 basis points), respectively.

Other income witnessed an increase of +17%/+8% YoY/QoQ. Resultantly, Pre-provision operating profit came in at Rs 16.6 billion, up 6%/up +5% YoY/QoQ growth in line with our estimates. However, credit cost for the quarter was little higher at Rs 7.2 billion versus. Rs 6.5 billion in Q3 FY24 leading to improvement in provision coverage ratio.

Hence, profit after tax came in at Rs 7.3 billion (up ~4%/flattish YoY (adjusted for one time in Q4 FY23)/QoQ) versus. our expectations of Rs 7.7 billion. Gross non-performing assets decreased sequentially and came in at 1.88% which is lower by 16bps QoQ, net non-performing assets at 0.60% which also came lower by 8bps QoQ. Capital to risk assets ratio came in at 16.11%.

We maintain our 'Buy' recommendation for the stock. We roll forward to FY26 from H1 FY26 and value IDFC First Bank at two times adjusted book value for FY26E, resulting in a revised target price of Rs 106.

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