Check Before You Invest : IDBI Bank Ltd

BSE: 500116 NSE: IDBI ISIN: INE008A01015

| Sector: BFSI | Industry: Bank - Private

Snapshot

Q.1 Which industry/sub-sector does IDBI Bank Ltd belong to?

IDBI Bank Ltd belongs to the BFSI sector, operating specifically within the Bank - Private segment.

Q.2 Is IDBI Bank Ltd a good quality company?

IDBI Bank Ltd is a weak quality company, based on a inconsistent 10-year financial track record.

Q.3 Is IDBI Bank Ltd undervalued or overvalued?

IDBI Bank Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is IDBI Bank Ltd a good buy now?

IDBI Bank Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of IDBI Bank Ltd?

IDBI Bank Ltd Total Income growth is 12.14% for FY-2025, which is above its 5-year CAGR of 5.97%, indicating faster growth.

Q.2 Return on Assets of IDBI Bank Ltd?

IDBI Bank Ltd Return on Asset is 2%, which is above its 5-year historical median of 1.2%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NIM%	3.84	3.84
PPOP%	13.06	24.61
RoA%	2	1.2

Q.3 Return on Equity (ROE) of IDBI Bank Ltd?

IDBI Bank Ltd Return on Equity is 16.1% for FY-2025, which is above its 5-year historical median of 10.2%, indicating the business is making better use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of IDBI Bank Ltd?

IDBI Bank Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 13.06% for FY-2025, which is below its 5-year median(24.61%), indicating decreasing margins.

Q.5 Net Interest Margin of IDBI Bank Ltd?

IDBI Bank Ltd Net Interest Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 3.84% for FY-2025, which is in line with its 5-year median( 3.84%), indicating stable margins.

Q.6 Total Asset growth of IDBI Bank Ltd?

IDBI Bank Ltd Total Asset growth is 13.25% for FY-2025, which is above its 5-year CAGR of 6.55%, indicating faster growth.

Q.7 Cost to Income ratio of IDBI Bank Ltd?

IDBI Bank Ltd Cost to Income ratio which represents the cost incurred for every Rs.100 earned is 43.5% for FY-2025, is lower its historical 5-year median of 46.1%, indicating deteriorated cost management.

Q.8 Capital Adequacy ratio of IDBI Bank Ltd?

IDBI Bank Ltd Capital Adequacy ratio (CAR) is 25.05% for FY-2025, which is above the regulatory requirement of 12%, indicating strong capital position.

Q.9 Asset Quality of IDBI Bank Ltd?

IDBI Bank Ltd Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 2.98% for FY-2025, which is below its 5-year median 6.38%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 0.15% which is below its 5-year median( 0.92%), indicating improving asset quality.

Ownership & governance

Q.1 Promoter shareholding and pledge status of IDBI Bank Ltd?

Promoters hold 94.71% of the IDBI Bank Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of IDBI Bank Ltd vs Industry Peers?

IDBI Bank Ltd AUM CAGR is 6.55%, compared to the 5-year industry median CAGR of 12.53%, indicating slower growth and losing its market share.

Q.2 Profit metrics (NIM, PPOP, RoA) of IDBI Bank Ltd vs industry peers

IDBI Bank Ltd profit metrics are in line with the industry median level of 7.74%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NIM%	3.84	3.84
PPOP%	13.06	18.17
RoA%	2	1.2

Q.3 Operating efficiency of IDBI Bank Ltd vs industry peers?

IDBI Bank Ltd Cost to Income (46.1) is below the industry median of (53.8); while the current ROE (10.2) are in line with than the 5-year average Industry ROE (10.2). This shows that the business is positioned in the middle quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NIM%	3.84	3.84
PPOP%	13.06	18.17
RoA%	2	1.2
Cost to Income%	43.5	53.8
ROE%	16.1	10.2

Valuation & price assessment

Q.1 Stock return of IDBI Bank Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 1% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	1%	16.5%	11.5%	-5%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	8.86	15.93	13.38
Price to Book	1.35	1.80	1.37
Price to Sales	2.81	3.17	1.77
EV to EBITDA	7.58	8.45	7.70

Q.4 Valuation ratios of IDBI Bank Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 1.35% is lower than its historical median of 1.80%, indicating that at the current price the stock is undervalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

IDBI Bank Ltd return on invested capital (ROIC) is 23.42% for FY-2025, is higher than its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

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