NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
We upgrade IDFC First Bank Ltd. to Buy (from Hold) as we see the near-term (H1 FY25) stagnation in the cost-to-income ratio/rise in credit costs likely being outweighed by industry-leading deposits/loan/PAT growth.
For FY24-26, we see deposits growth (~13-14% compound annual growth rate) and PAT growth (mid-teen CAGR) as key challenges for the banking system. That said, we believe IDFC First Bank with industry leading deposits growth (26% CAGR over FY24-26; double of industry) and PAT growth (~30% CAGR; double of industry) look exciting.
IDFC First Bank is also likely to be least impacted by the RBI's Projects Under Implementation draft guidelines. Merger consummation within a quarter, or so, should lift FY25E/26E book value per share by 3โ4% (not in our estimates yet) on reduced share-count.
We broadly maintain our PAT estimates (upgrade of ~1%). We raise our target price to Rs 95 (from Rs 85), valuing the stock at ~1.7 times FY26E ABV.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit 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 NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories โ On NDTV Profit.
