⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
IDFCFIRSTB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | IDFCFIRSTB | Market Cap | 70,544 Cr. | Current Price | 82.0 ₹ | High / Low | 87.0 ₹ |
| Stock P/E | 43.5 | Book Value | 54.4 ₹ | Dividend Yield | 0.30 % | ROCE | 6.23 % |
| ROE | 4.32 % | Face Value | 10.0 ₹ | DMA 50 | 82.4 ₹ | DMA 200 | 76.0 ₹ |
| Chg in FII Hold | 12.1 % | Chg in DII Hold | -1.95 % | PAT Qtr | 503 Cr. | PAT Prev Qtr | 352 Cr. |
| RSI | 44.0 | MACD | -0.12 | Volume | 2,84,38,581 | Avg Vol 1Wk | 3,23,58,576 |
| Low price | 52.5 ₹ | High price | 87.0 ₹ | PEG Ratio | 0.37 | Debt to equity | 7.03 |
| 52w Index | 85.6 % | Qtr Profit Var | 48.0 % | EPS | 2.11 ₹ | Industry PE | 15.8 |
📊 Core Financials
- Revenue & Profitability: PAT improved from 352 Cr. to 503 Cr. QoQ (+48%), showing strong growth momentum.
- Margins: ROE at 4.32% and ROCE at 6.23% remain weak, reflecting limited efficiency and profitability.
- Debt: Debt-to-equity ratio of 7.03 is very high, indicating significant leverage risk.
- Cash Flow: Dividend yield of 0.30% is minimal, suggesting reinvestment focus rather than shareholder payouts.
💹 Valuation Indicators
- P/E Ratio: 43.5 vs Industry PE of 15.8 → highly overvalued compared to peers.
- P/B Ratio: Current Price (82 ₹) / Book Value (54.4 ₹) ≈ 1.51, moderate valuation.
- PEG Ratio: 0.37 indicates some growth potential, but valuation remains stretched.
- Intrinsic Value: Current price appears expensive relative to earnings power.
🏦 Business Model & Competitive Advantage
- IDFC First Bank focuses on retail banking, consumer loans, and digital expansion.
- Competitive advantage lies in aggressive retail lending and strong FII interest (+12.1%).
- However, high leverage and weak profitability metrics limit long-term sustainability.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Safer entry between 70 ₹ – 75 ₹ (near DMA 200 support).
- Long-Term Holding: Suitable only for aggressive investors betting on retail banking growth. Conservative investors should wait for debt reduction and improved ROE.
✅ Positive
- Strong quarterly profit growth (+48%).
- High FII inflows (+12.1%) show institutional confidence.
- Retail-focused business model with growth potential.
⚠️ Limitation
- High debt-to-equity ratio (7.03) raises financial risk.
- Low ROE (4.32%) and ROCE (6.23%) indicate weak returns.
- Dividend yield of 0.30% offers limited shareholder reward.
📉 Company Negative News
- Stock trades at a high P/E (43.5), making it expensive compared to peers.
- DII holdings decreased (-1.95%), showing reduced domestic institutional confidence.
📈 Company Positive News
- Quarterly PAT surged by 48%, showing strong earnings momentum.
- FII holdings increased significantly, reflecting global investor interest.
🏭 Industry
- Banking sector PE at 15.8 indicates overall lower valuations compared to IDFC First Bank.
- Retail banking growth driven by digital adoption and rising consumer credit demand.
- Competition from established private banks (HDFC, ICICI) remains strong.
🔎 Conclusion
- IDFC First Bank shows strong profit growth and rising FII interest, but valuation is stretched.
- High leverage and weak return ratios pose risks for long-term investors.
- Best suited for aggressive investors entering near 70–75 ₹, while conservative investors should wait for improved fundamentals.
Would you like me to also create a side-by-side HTML comparison of IDFC First Bank with IDBI to highlight which offers better value in the banking sector?