IDFC First Bank: Shares of IDFC First Bank have logged consecutive gains in the last 8 trading sessions even as the frontline indices traded on a jittery note.
IDFC First Bank has surged 6.6 per cent in the last 8 straight trading sessions, up 7.1 per cent so far this month, and has zoomed 69.5 per cent so far this financial year.
However, the stock has been in a strong bullish phase for over a year now. Data show that the stock has surged over 110 per cent in the last one year against an 11 per cent gain in the equity benchmark Sensex. On a monthly basis, the stock has been in the green since April 2023.
What Should Investors Do Now?
Jehan Bhadha, Senior-AVP, Equity Research – Retail, Nirmal Bang, said: “Bhadha pointed out that IDFC First Bank has transformed from a predominantly wholesale bank saddled with higher NPAs to a diversified and digital-oriented retail bank, both on the assets and liability sides.”
Bhadha added that the bank has repaired its balance sheet, stress-tested the retail portfolio during Covid, plugged product gaps and is now set for the next level of growth driven by commercial banking, credit cards, and home loans. It has invested well in digital capabilities, branch and product expansion, and has a presence across retail products.
“We believe the reinvigorated retail-heavy bank is now well-poised to deliver strong loan growth (nearly 25 per cent CAGR) and gain market share. This coupled with industry-best margins (6 per cent+) and reduction in cost-to-income ratio (from 71 per cent to 66 per cent by FY26E) should lead to a higher RoA (return on assets) of 1.4 per cent and RoE (return on equities) of 15 per cent in FY26E compared to 1.1 per cent and 11 per cent, respectively, in FY23,” said Bhadha.
Vaishali Parekh, Vice President – Technical Research, Prabhudas Lilladher observed that the stock has currently indicated a breakout above Rs 90 with a positive bullish candle pattern on the daily chart to strengthen the trend further. With volume participation on the rise once again, it is anticipated to rise further with Rs 87 as the immediate support zone as of now.
“One can make a fresh entry. With the overall bias strong and as there is much upside potential visible, we expect the next upside near-term target to be at around Rs 98-99 levels,” said Parekh.
“With the overall chart pattern looking good and attractive, for the longer term timeframe, one can expect Rs 110 and thereafter Rs 145 as the target levels, as per our trend-based Fibonacci levels and can maintain the stop loss of 50EMA value,” Parekh said.
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