IDFC First Bank shares slip 6% in trade; should you buy, sell or hold?

IDFC First Bank shares lost as much as 6 per cent in Monday's (April 29) trade and touched the day's low at Rs 80.05 apiece on BSE. The selling pressure in the stock came after the private sector lender reported Q4 results.

At around 10:12 a.m., shares of IDFC First Bank traded 5.12 per cent, or Rs 4.34, lower at Rs 80.5 apiece. The market capitalisation of the company at around the same time stood at Rs 56,905.82 crore. The stock closed 3.74 per cent lower at Rs 81.67 apiece. 

IDFC First Bank Q4 results 

On Saturday the private sector lender logged a consolidated net profit of Rs 724.3 crore against Rs 802.6 crore year-on-year (YoY) which was down 9.8 per cent and missed the Zee Business' estimate of Rs 735 crore. 

For the quarter ended March 31, the company registered net interest income of Rs 4,468.9 crore against Rs 3,596.7 crore YoY, a slight miss from the estimate of Rs 4,480 crore. 

The provisions for the quarter under review stood at Rs 722.3 crore against Rs 482.4 crore a year ago, up 49.7 per cent YoY. The gross non-performing asset (GNPA) of the company for the quarter under review stood at 1.88 per cent which was estimated at 2 per cent. The Net non-performing asset (NNPA) for the quarter stood at 0.6 per cent against 0.68 per cent quarter-on-quarter (QOQ).

Meanwhile, the net interest margin (NIM) stood at 6.35 per cent against 6.42 per cent QOQ.

Management commentary

IDFC First Bank in its Guidance 2.0 has said that the Bank has exceeded or met or is most likely to meet most targets as provided under Guidance 1.0. 

It further said that they have a strong proven business model that is incrementally very profitable.

"We are building a world-class bank with the highest levels of corporate governance, a consistent balance sheet growth of around 20 per cent, with strong asset quality of GNPA < 1.5 per cent and net NPA of < 0.4 per cent, with ROE of 17-18 per cent, with contemporary technology, unique business model, and high levels of Customer Centricity," the management said.

What should investors do?

Jefferies maintained a 'buy' on the stock and gave a target price of Rs 100 apiece. Meanwhile, Morgan Stanley iterated 'equalweight' and cut the target to Rs 78 from Rs apiece 80. 

Additionally, JP Morgan continued with a 'neutral' rating and gave a target of Rs 75 apiece. 

IDFC First Bank share price: Past performance 

In a year, IDFC First Bank shares have gained over 26 per cent against Nifty50's rise of over 24 per cent. 

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