IDFC First Bank - Building A Sustainable Franchise: Motilal Oswal

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..Motilal Oswal Report.IDFC First Bank Ltd. has been on track to deliver sustained improvement in earnings. The bank has built a strong retail franchise with more than 70% mix of retail assets and has delivered on most parameters under Guidance 1.0, barring the cost/income ratio, on which the bank suggests a strong progress from H2 FY25. Management remains confident on delivering industry-leading business growth while focusing on building a diversified retail portfolio. Cost ratios have been sticky as the bank continued to make significant investments in the business, expediting the transition journey from an NBFC into a bank with robust liability franchise and a well-diversified loan portfolio with top notch digital capabilities. However, management has suggested for a continued improvement in cost ratios, mainly from H2 FY25E, as operating leverage improves and the bank follows a branch-light distribution and sourcing model. We thus estimate IDFC First Bank to deliver a pre-provision operating profit/profit after tax compound annual growth rate of 35%/30% over FY24-26E leading to an return on asset/return on equity of 1.3%/13.2%. Reiterate Neutral with a target price of Rs 88 (premised on 1.6 times FY26E adjusted book value)..Click on the attachment to read the full report:.TCS - Mega Deals Led Outperformance: HDFC Securities.DISCLAIMERThis 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.

IDFC First Bank - Building A Sustainable Franchise: Motilal Oswal

Tech stack to aid business growth; cost ratios to improve from H2 FY25

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