IDBI - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.7
| Stock Code | IDBI | Market Cap | 1,17,436 Cr. | Current Price | 109 ₹ | High / Low | 118 ₹ |
| Stock P/E | 12.2 | Book Value | 64.0 ₹ | Dividend Yield | 1.92 % | ROCE | 6.76 % |
| ROE | 13.6 % | Face Value | 10.0 ₹ | DMA 50 | 101 ₹ | DMA 200 | 95.0 ₹ |
| Chg in FII Hold | 0.05 % | Chg in DII Hold | 0.01 % | PAT Qtr | 1,935 Cr. | PAT Prev Qtr | 3,627 Cr. |
| RSI | 63.4 | MACD | 0.14 | Volume | 5,57,59,536 | Avg Vol 1Wk | 1,94,38,903 |
| Low price | 66.1 ₹ | High price | 118 ₹ | PEG Ratio | 0.27 | Debt to equity | 4.87 |
| 52w Index | 82.4 % | Qtr Profit Var | 1.42 % | EPS | 8.95 ₹ | Industry PE | 15.8 |
📊 IDBI shows mixed signals for long-term investment. The PEG ratio of 0.27 suggests undervaluation relative to growth, and ROE at 13.6% is respectable. However, ROCE at 6.76% and a debt-to-equity ratio of 4.87 highlight efficiency and leverage concerns. The stock trades at a P/E of 12.2, below the industry average of 15.8, offering valuation comfort. Current price (109 ₹) is above DMA 50 (101 ₹) and DMA 200 (95 ₹), indicating bullish momentum but close to resistance at 118 ₹.
💡 Ideal Entry Zone: 95 ₹ – 101 ₹ (aligned with DMA 200 and DMA 50 support levels).
📈 Exit / Holding Strategy: If already holding, maintain for 2–3 years provided ROE stays above 12% and debt levels reduce. Consider partial profit booking near 118 ₹ resistance. Long-term holding is viable if ROCE improves and dividend yield remains consistent.
Positive
- 📌 PEG ratio of 0.27 indicates undervaluation.
- 📌 ROE at 13.6% reflects decent profitability.
- 📌 Dividend yield of 1.92% adds steady income.
- 📌 Strong trading volume supports liquidity.
- 📌 Price above DMA 50 and DMA 200 shows bullish trend.
Limitation
- ⚠️ ROCE at 6.76% shows weak capital efficiency.
- ⚠️ Debt-to-equity ratio of 4.87 is very high.
- ⚠️ Quarterly PAT dropped significantly from 3,627 Cr. to 1,935 Cr.
- ⚠️ Resistance near 118 ₹ may cap upside potential.
Company Negative News
- ❌ Decline in quarterly profits (Qtr Profit Var: 1.42%).
- ❌ High leverage remains a structural risk.
Company Positive News
- ✅ Marginal increase in FII and DII holdings.
- ✅ EPS at 8.95 ₹ supports valuation comfort.
Industry
- 🏦 Industry PE at 15.8 vs stock PE 12.2 shows valuation gap.
- 🏦 Banking sector growth supported by credit expansion and government reforms.
Conclusion
🔎 IDBI offers valuation comfort and decent ROE, but high debt and weak ROCE limit long-term attractiveness. Best suited for cautious investors seeking undervalued entry points. Ideal strategy: accumulate near 95–101 ₹, hold for 2–3 years, and monitor debt reduction with profitability improvements.