IDBI - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 My Thought Process

You're seeking a full-spectrum fundamental analysis of IDBI Bank, with a numeric rating and strategic investment guidance. I’ve weighed profitability, capital efficiency, valuation, and business durability, and incorporated the latest updates on its financials and strategic divestment progress

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📊 Fundamental Analysis of IDBI Bank

🔍 Core Financials

Profitability

PAT Qtr: ₹2,007 Cr vs ₹2,051 Cr — stable with YoY growth of 16.8%.

EPS: ₹7.26 — decent for a PSU bank.

ROE: 13.6%, ROCE: 6.76% — solid ROE, though ROCE remains modest due to capital-heavy structure.

Leverage & Liquidity

Debt-to-equity: 5.12 — high, typical for banks; manageable due to improving asset quality.

Dividend Yield: 2.27% — attractive for income-focused investors.

Cash Flow & Stability

Historical 3-year return: 237.1% — strong compounding performance

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Profit margin: 44.1% and quarterly revenue growth of 8.7% — solid operational metrics

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📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 12.7 Fairly valued vs industry PE of 12.6

P/B Ratio ~1.6 Reasonable given ROE and dividend yield

PEG Ratio 0.28 Very attractive — undervalued relative to growth

Intrinsic Value ~₹95–₹100 Slight upside from current price

🏦 Business Model & Competitive Edge

Segment Focus: Retail and corporate banking, with a growing digital footprint.

Moat: Government backing, improving asset quality, and strategic divestment potential.

Growth Drivers

Strategic divestment expected to conclude by FY26, unlocking value

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Strong quarterly earnings and improving credit profile.

Expansion in Tier 2/3 cities and digital onboarding.

📈 Technical & Entry Guidance

Current Price: ₹92.5

DMA 50/200: ₹92.2 / ₹88.1 — trading near support levels.

RSI: 51.4 — neutral zone.

MACD: 0.30 — mild bullish momentum.

🎯 Entry Zone

Ideal Buy Range: ₹88–₹91 — near DMA 200 support.

Stop Loss: ₹84

Target: ₹105–₹110 in medium term

🕰️ Long-Term Holding Outlook

Hold if invested: Strong fundamentals, dividend yield, and divestment upside justify long-term holding.

Buy on dips: Especially near ₹90 zone.

Growth Triggers: Strategic stake sale, improving margins, and PSU banking reforms.

⭐ Fundamental Rating

4.3

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