IDFC FIRST Bank Q4 Results Review: Well Placed On Growth, Rate Cycle; ICICI Securities Maintains 'Buy'

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ICICI Securities Report

IDFC First Bank Ltd. reported muted Q4 FY25 PAT of Rs 3.04 billion with RoA of 0.36%, impacted by elevated provisioning. Funded assets growth remained strong at ~20% YoY (5% QoQ). Deposits growth, too, was strong at 26% YoY (6% QoQ) with CASA growth of ~25% YoY. Reported net interest margin declined 9bps QoQ to 5.95% due to adverse loan mix, while cost of deposits was stable. MFI slippages, as expected, jumped but overall slippages were stable on improvement in non-MFI slippages (key positive).

Net non-performing asset (53bps) and provision coverage ratio (72%) were broadly stable QoQ. MFI slippages jumped but seem to have peaked out as SMA 0 improved sharply and collection efficiency for Mar’25 increased to >99% along with stable trends in Apr’25.

Overall, we believe RoA has bottomed out and expect 1% RoA by exit FY26E. Maintain Buy.

Key risks: Higher-than-expected slippages and slower-than-expected operating leverage.

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