IDFC First Bank hits a milestone of Rs 100 per share today: Is it the next HDFC Bank?

Today, shares of IDFC First Bank have reached a significant milestone of Rs 100. It opened the day at Rs 99.29 and hit an intraday high of Rs 100.74. Moreover, today it reached a 52-week high of Rs 100.74.

At the time of writing this article, the shares are trading at Rs 98.32 each on the BSE.

When we assess the company’s stock performance, it becomes evident that it has delivered remarkable returns to its investors. Over the past year, it has yielded a substantial 94% return, and over the past three years, it has recorded an impressive 211% return.

During the challenging period of the COVID-19 pandemic, the company’s shares experienced a significant decline, hitting an all-time low of Rs 17.65 in March 2020. However, from this low point, they rebounded to reach an all-time high of Rs 100.74. If we calculate the returns from this low to the high, it amounts to an exceptional 471%.

IDFC First Bank has achieved a position among the top 10 most valuable publicly listed banks in India. It has surpassed Union Bank of India and Canara Bank in terms of market valuation, reaching a valuation of Rs 65,325 crore as of September 4. Union Bank of India holds a market capitalization of Rs 65,251 crore, while Canara Bank is valued at Rs 61,081.77 crore, according to data from BSE.

Furthermore, in terms of profitability, IDFC first bank holds a sixteenth position as per the net profit reported by the banks both in FY23 as well as in Q1 FY24.

At the beginning of this month, the GQG Partners Emerging Markets Equity Fund purchased 17,16,02,498 shares at an average price of Rs 89 each, amounting to Rs 1527.26 crore.

Earlier this year, GQG Partners made investments in Adani Group shares. As of now, they hold a 2.67% stake in Adani Enterprises, a 5.03% stake in Adani Ports, a 7.73% stake in Adani Power, and a 3.5% stake in Adani Green.

Let’s examine the financial performance of the bank in Q1 FY24. 

Loans and advances increased by 25%, reaching Rs 1,71,578 crore, while deposits saw a significant 44% year-on-year growth, totalling Rs 1,48,474 crore. The CASA Ratio decreased to 46.5% from 50.04% in Q1 FY23 during the same period.

Turning our attention to the bank’s asset quality, the Gross Non-Performing Asset (GNPA) and Net Non-Performing Asset (NNPA) ratios were at 3.36% and 2.17%, respectively.

In terms of profitability, the company’s net profit witnessed a substantial 61% year-on-year growth, rising from Rs 474 crore to Rs 765 crore in the last quarter. The Return on Asset (ROA) ratio stands at 1.26%, while the Return on Equity (ROE) is at 11.78%.

Many market participants compare IDFC First Bank to HDFC Bank and anticipate that it will become the next HDFC Bank in the future. Without a doubt, it is a good company based on its performance. However, bringing this anticipation to reality will require patience.

Investors must keep this stock on their radar.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.