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Motilal Oswal's research report on IDFC First Bank

IDFC First Bank (IDFCFB) reported 4QFY25 PAT of INR3.04b (58% YoY decline, 6% beat to MOFSLe) amid lower tax expense. NII grew 10% YoY/ flat QoQ to INR49.1b (in line). NIMs contracted 9bp QoQ to 5.95% (in line), dragged by a decline in the MFI business. Opex grew 12.2% YoY/ 1.4% QoQ to INR49.9b (in line). C/I ratio, thus, continued to stand elevated at ~73.4%. Net advances grew 19.8% YoY/4.5% QoQ, while deposits continued to grow at a much faster pace at 25.7% YoY/ 6.4% QoQ. The CD ratio, thus, declined to 92.5% vs 94.2% in 4QFY25. The GNPA ratio moderated 7bp QoQ to 1.87%, while the NNPA ratio increased slightly by 1bp QoQ to 0.53%. The PCR ratio moderated 133bp QoQ to 72.3%.

Outlook

We reduce our earnings by 7% for FY26E amid NIM and credit cost pressures, and estimate FY27 RoA/RoE at 1.1%/10%. Reiterate Neutral with a TP of INR72 (premised on 1.3x FY27E ABV).

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IDFC First Bank - 28042025 - moti

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