IDFC First Bank Q4 Results Review - Treasury Gains Boost Earnings; Outlook Remains Healthy: Motilal Oswal

Motilal Oswal Report

IDFC First Bank Ltd. reported a profit after tax of Rs 8 billion (25% beat, up 134% YoY) in Q4 FY23, boosted by trading gains of Rs 2.2 billion. Net interest income grew by 35% YoY, with margins expanding 5 bps QoQ to 6.41%.

Business growth remained strong as the loan book was driven by healthy growth in commercial finance retail loans. The wholesale book declined 6% YoY. Deposits grew at a healthy 37% YoY, with current account and savings account deposits up 8% QoQ. Thus, the CASA ratio stood strong at ~50%.

IDFC First Bank is entering a phase of strong loan growth as the drag from the wholesale book continues to moderate. This will be aided by a strong pickup in profitability due to the replacement of high-cost borrowings, better cost trends and controlled credit costs.

We thus estimate a 31% earnings compound annual growth rate over FY23-25 and return on asset/return on equity of 1.3%/13.5% in FY25.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.