Shares of IDFC First Bank are likely to be in focus after JP Morgan maintained an ‘Underweight’ rating on the stock and indicated a significant downside from current market levels.
According to JP Morgan, while an end to microfinance (MFI) stress, a capital raise, and rate cut-led cost of funds (CoF) support are expected in FY26, these positives are already priced in at the current valuation of 1.2x FY26 estimated price-to-book.
The brokerage noted that current valuations imply investors are now focusing on FY27 earnings for a meaningful improvement in returns, particularly the return on assets (RoA) trajectory.
At the current market price of Rs 65.99 per share, JP Morgan’s target price of Rs 50 implies a downside of approximately 24%.
Disclaimer: This article is for informational purposes only. Investors are advised to consult certified financial advisors before making any investment decisions.
