IDFCFIRSTB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | IDFCFIRSTB | Market Cap | 59,910 Cr. | Current Price | 69.6 ₹ | High / Low | 87.0 ₹ |
| Stock P/E | 36.6 | Book Value | 54.7 ₹ | Dividend Yield | 0.36 % | ROCE | 5.99 % |
| ROE | 3.84 % | Face Value | 10.0 ₹ | DMA 50 | 69.2 ₹ | DMA 200 | 73.2 ₹ |
| Chg in FII Hold | -0.24 % | Chg in DII Hold | 0.35 % | PAT Qtr | 319 Cr. | PAT Prev Qtr | 503 Cr. |
| RSI | 56.7 | MACD | 0.74 | Volume | 2,56,06,993 | Avg Vol 1Wk | 3,61,30,429 |
| Low price | 58.1 ₹ | High price | 87.0 ₹ | PEG Ratio | -2.95 | Debt to equity | 7.04 |
| 52w Index | 40.0 % | Qtr Profit Var | 4.89 % | EPS | 1.90 ₹ | Industry PE | 15.0 |
Core Financials:
IDFC First Bank shows weak fundamentals. ROE is only 3.84% and ROCE 5.99%, reflecting poor efficiency. EPS is very low at ₹1.90, and quarterly PAT dropped from ₹503 Cr to ₹319 Cr, signaling earnings pressure. Debt-to-equity is high at 7.04, raising leverage concerns.
Valuation:
Stock P/E of 36.6 is significantly higher than industry average (15.0), suggesting overvaluation. PEG ratio is negative (-2.95), indicating unsustainable growth expectations. Price-to-book is ~1.27, not compelling given weak profitability. Dividend yield is negligible at 0.36%.
Business Model & Health:
The bank has built a strong retail franchise but struggles with profitability. High leverage and weak return metrics limit competitiveness. Business model is growth-oriented but lacks efficiency compared to peers.
Entry Zone:
Ideal entry zone: ₹60–₹63. Current price ₹69.6 is above fair value. Long-term holding is risky unless ROE improves and debt reduces.
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Positive
- Strong retail banking presence
- Marginal increase in DII holdings (+0.35%)
- Technicals show mild recovery: RSI 56.7, positive MACD (0.74)
Limitation
- Very high P/E (36.6) vs industry (15.0)
- Weak ROE (3.84%) and ROCE (5.99%)
- High debt-to-equity (7.04)
- EPS extremely low at ₹1.90
- Dividend yield negligible (0.36%)
Company Negative News
- Quarterly PAT decline from ₹503 Cr to ₹319 Cr
- FII holdings reduced (-0.24%)
Company Positive News
- Stable retail loan growth continues
- DII confidence improved (+0.35%)
- Technical momentum shows mild recovery
Industry
Banking sector trades at industry P/E of 15.0, supported by credit growth. Peer banks show stronger ROE and ROCE, highlighting IDFC First Bank’s relative inefficiency.
Conclusion
IDFC First Bank is overvalued with weak fundamentals. Rating: 2.8. Entry near ₹60–₹63 is preferable for cautious investors. Long-term holding requires significant improvement in ROE and debt reduction. Exit strategy around ₹80–₹85 if fundamentals stagnate.
Would you like me to prepare a comparative HTML benchmarking table against peers like SBI, ICICI, and Axis Bank so you can see IDFC First Bank’s relative valuation and efficiency in one view?