Shares of IDFC First Bank Ltd declined 4.26% to ₹57.78 on Friday, dropping ₹2.57 from the previous close of ₹60.35, after Morgan Stanley reaffirmed its ‘Equal-weight’ rating and maintained a target price of ₹58 per share—slightly below Thursday’s closing price.
While acknowledging the bank’s solid business performance in the March quarter, Morgan Stanley cited valuation concerns as a key reason for its cautious stance. The brokerage noted the bank’s gross funded assets grew by 20.3% year-on-year (YoY) in Q4FY25, closely matching the 20.4% rise seen in the prior quarter.
Customer deposits continued to gain momentum, rising 6.7% quarter-on-quarter (QoQ), compared to 4.3% QoQ growth in Q3FY25. The bank’s total deposit base now stands at ₹2,42,546 crore, while loans and advances grew to ₹2,41,848 crore, up 20.3% YoY and 4.7% QoQ.
In its Q4FY25 business update, IDFC First Bank reported that its total business—including loans, advances, and deposits—rose 22.7% YoY to ₹4,84,394 crore as of March 31, 2025. The bank highlighted that it has continued reducing its credit-deposit ratio, bringing the incremental ratio down to 75.7% for FY25.
Despite consistent operational metrics, Morgan Stanley believes the stock’s current valuation limits near-term upside. The market will closely watch deposit sustainability and margin trajectory in upcoming quarters.
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