Check Before You Invest : IDFC First Bank Ltd

BSE: 539437 NSE: IDFCFIRSTB ISIN: INE092T01019

| Sector: BFSI | Industry: Bank - Private

Snapshot

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

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

Q.2 Is IDFC First Bank Ltd a good quality company?

IDFC First Bank Ltd is a average quality company, based on a somewhat consistent 9-year financial track record.

Q.3 Is IDFC First Bank Ltd undervalued or overvalued?

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

Q.4 Is IDFC First Bank Ltd a good buy now?

IDFC First Bank Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of IDFC First Bank Ltd?

IDFC First Bank Ltd Total Income growth is 19.92% for FY-2025, which is above its 5-year CAGR of 19.34%, indicating faster growth.

Q.2 Return on Assets of IDFC First Bank Ltd?

IDFC First Bank Ltd Return on Asset is 0.5%, which is in line with its 5-year historical median of 0.5%, indicating stable earnings on assets.

	Current Level	5-year Historic Median
NIM%	5.87	5.58
PPOP%	18.61	24.7
RoA%	0.5	0.5

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

IDFC First Bank Ltd Return on Equity is 4.2% for FY-2025, which is in line with its 5-year historical median of 4.2%, indicating the business is making similar use of its shareholders capital.

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

IDFC First Bank Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 18.61% for FY-2025, which is below its 5-year median(24.7%), indicating decreasing margins.

Q.5 Net Interest Margin of IDFC First Bank Ltd?

IDFC First 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 5.87% for FY-2025, which is above its 5-year median( 5.58%), indicating increasing margins.

Q.6 Total Asset growth of IDFC First Bank Ltd?

IDFC First Bank Ltd Total Asset growth is 16.1% for FY-2025, which is below its 5-year CAGR of 18.18%, indicating slower growth.

Q.7 Cost to Income ratio of IDFC First Bank Ltd?

IDFC First Bank Ltd Cost to Income ratio which represents the cost incurred for every Rs.100 earned is 71.9% for FY-2025, is lower its historical 5-year median of 72.1%, indicating deteriorated cost management.

Q.8 Capital Adequacy ratio of IDFC First Bank Ltd?

IDFC First Bank Ltd Capital Adequacy ratio (CAR) is 15.48% for FY-2025, which is above the regulatory requirement of 12%, indicating strong capital position.

Q.9 Asset Quality of IDFC First Bank Ltd?

IDFC First Bank Ltd Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 1.87% for FY-2025, which is below its 5-year median 2.51%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 0.53% which is below its 5-year median( 0.86%), indicating improving asset quality.

Ownership & governance

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

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

Peer comparison (industry-wise, mcap)

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

IDFC First Bank Ltd AUM CAGR is 18.18%, compared to the 5-year industry median CAGR of 12.53%, indicating faster growth and gaining its market share.

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

IDFC First 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%	5.87	3.84
PPOP%	18.61	18.17
RoA%	0.5	1.2

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

IDFC First Bank Ltd Cost to Income (72.1) is above the industry median of (53.8); while the current ROE (4.2) are below 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%	5.87	3.84
PPOP%	18.61	18.17
RoA%	0.5	1.2
Cost to Income%	71.9	53.8
ROE%	4.2	10.2

Valuation & price assessment

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

Over the last 9 years, the stock has delivered a CAGR of 3.8% based on the current price.

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

	9Y	5Y	3Y	1Y
Share Price CAGR	3.8%	5%	2.9%	5.4%

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	37.2	21.84	13.38
Price to Book	1.27	1.46	1.37
Price to Sales	1.48	1.78	1.77
EV to EBITDA	11.82	16.22	7.70

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

The current Price to book ratio (P/B) 1.27% is lower than its historical median of 1.46%, 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?

IDFC First Bank Ltd return on invested capital (ROIC) is 16.88% for FY-2025, is higher than its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

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