IDFC First Bank shares declined by 4% after the bank reported a sharp 52% year-on-year (YoY) drop in net profit for Q3 FY25. As of 9:16 AM, the shares were trading 4.06% lower at Rs 59.74.
The bank shared that its net profit stood at Rs 339.43 crore, compared to Rs 715.68 crore in Q3 FY24. The decline was primarily driven by a significant rise in provisions, which surged 104.5% YoY to Rs 1,337 crore from Rs 654 crore.
The bank’s asset quality witnessed slight sequential deterioration. Gross non-performing assets (GNPA) rose to 1.94% in Q3 FY25, marginally up from 1.92% in Q2 FY25. Similarly, net non-performing assets (NNPA) increased to 0.52% from 0.48% in the previous quarter. These metrics reflect the bank’s cautious approach to managing potential credit risks.
On a positive note, deposits grew robustly to Rs 2,36,877 crore as of December 31, 2024, marking a 29.6% YoY increase. Advances also rose by 22% YoY to Rs 2,23,109 crore, driven by strong momentum in retail and corporate lending.
IDFC First Bank shares opened at ₹59.01 today, hitting a high of ₹60.10 and a low of ₹59.01 during the session. The stock is trading near its 52-week low of ₹59.01, significantly below its 52-week high of ₹86.10.
In the meantime, Brokerage firm Jefferies reiterated its buy rating on IDFC First Bank with a target price of Rs 73, despite the near-term challenges. While the bank’s profitability was impacted by slower topline growth and rising credit costs, its net profit grew 69.13% sequentially from Rs 200.7 crore in Q2 FY25. The microfinance (MFI) segment remains a key drag, with the brokerage expecting this pressure to persist for 2-3 quarters. However, stable asset quality in other segments and management’s focus on operational leverage offer optimism.
Jefferies has cut FY26-27 earnings estimates by 8-10% but maintains confidence in the bank’s long-term growth potential. Investors are advised to keep an eye on asset quality trends and the performance of the MFI portfolio in the coming quarters.
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