IDFC First Bank Q4 Results Review - Beat Across Parameters; Growth Momentum To Continue: Axis Securities

Stable asset quality to keep credit costs within guided range.

<div class="paragraphs"><p>An IDFC First Bank branch. (Source: BQ Prime)</p></div>
An IDFC First Bank branch. (Source: BQ Prime)

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

Axis Securities Report

IDFC First Bank Ltd. reported robust loan growth momentum (up 22% YoY/ 3% QoQ) in Q4 FY23, primarily driven by home loans (up 39% YoY/ 10% QoQ), wheels (up 34% YoY/ 7% QoQ) and rural finance (up 48% YoY/ 18% QoQ) with significant growth across the segments.

Healthy growth in advances and net interest margin at 6.41% aided net interest income growth of 35/20% YoY/QoQ.

Other income reported strong growth of 68/32% YoY/QoQ, largely led by growth in the fee income from the bank’s retail products. However, there was a gain of Rs ~200 crore on the redemption of venture capital investment which is one-time in nature.

With opex moderating, pre-provision operating profit reported strong growth of 89/24% YoY/QoQ. Thus, with robust growth in advances and NII and reduced credit cost, the bank reported the highest ever quarterly profit at Rs 803 crore (up 134/33% YoY/QoQ).


We expect IDFC First Bank to maintain its growth momentum and model in credit/deposit growth of ~24/31% compound annual growth rate over FY23-25E.

While margins have been healthy, repayment of high-cost legacy loans will help the bank maintain its margins. We expect IDFC First Bank to witness return on asset expansion to ~1.3% by FY25E versus 1.1% in FY23 driven by- largely stable margins of ~6.2%, Improving opex ratios, and moderating credit costs.

Click on the attachment to read the full report:

Axis Securities IDFC FirstBank Q4FY23 Result Update.pdf
IDFC First Bank Q4 Results Review - Treasury Gains Boost Earnings; Outlook Remains Healthy: Motilal Oswal


This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.