Banking Stock Below Rs 100 Likely To Hit A Record High In 6-9 Months; Buy?

As a division of IDFC, an integrated infrastructure finance organisation, IDFC FIRST Bank is an Indian banking organisation with its headquarters located in Mumbai. On Tuesday, the shares of IDFC First Bank closed at Rs 82.72 apiece level with a market cap of Rs 58,482.41 Cr.

The scrip reached a 52-week-high of Rs 100.74 on (05/09/2023) and a 52-week-low of Rs 53.90 on (17/04/2023). In the last 1 year, the shares of IDFC First Bank have gone up by 50.68%; however, Mr. Aditya Gaggar, Director of Progressive Shares, believes that there is still room for growth in the stock over the next 6.9 months, with a target price of Rs. 104 and Rs. 124, which would represent the stock's record high level.

IDFC FIRST Bank Share Price Target

CMP: Rs 84, target: Rs104 & Rs124, duration: 6-9 Months, stop-loss: Rs 69

Commenting on the investment rationale behind the stock, Aditya Gaggar said "Consolidation of over 7 months comes to an end with a Bullish Flag and Pole Formation breakout. Leading indicator RSI confirms price movement with a falling trendline breakout as well as hidden bullish divergence. +DMI has crossed -DMI which is a positive sign and a reading of 21 indicates the beginning of a strong trend. MACD is on the verge of giving a positive crossover. We recommend a BUY on the company at the current market price of Rs84 or decline upto Rs82 with the closing stop loss of Rs69 for a target of Rs104-Rs124 with a horizon of 6-9 months."

IDFC FIRST Bank Financials

According to IDFC First Bank, its net profit climbed 18% YoY from Rs. 605 crore in Q3-FY23 to Rs. 716 crore in Q3-FY24 for the quarter that ended on December 31, 2023. From Rs. 3,285 crore in Q3-FY23 to Rs. 4,287 crore in Q3-FY24, Net Interest Income (NII) jumped by 30% YoY. In Q3-FY24, net interest margin was 6.42%, compared to 6.13% in Q3-FY23 and 6.32% in Q2-FY24. The bank's gross non-performing assets (GNPA) improved from 2.96% on December 31, 2022 to 2.04% as of December 31, 2023. The bank's net non-performing assets (NNPA) improved from 1.03% on December 31, 2022 to 0.68% on December 31, 2023.

Commenting on the guidance 2.0 for the next 5 Years (FY2024 to FY 2029), the management of IDFC First Bank said "The Bank has exceeded, met, or is most likely to meet most targets as provided under Guidance 1.0. We have a strong proven business model that is incrementally very profitable. Basis this model, we could do necessary investments and expenses for building the Bank, and yet grow profitability during FY 19-24. We have far greater visibility while providing Guidance 2.0 as compared to visibility of at time of Guidance 1.0. We are building a world class bank with highest levels of corporate governance, a consistent balance sheet growth of ~20%, with strong asset quality of GNPA

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.