In the midst of the current bullish trend in the stock market, IDFC First Bank emerges as a promising player, poised to reach new heights. Centrum Broking has officially initiated coverage on IDFC First Bank’s shares, marking it with a BUY recommendation and setting an ambitious target price of ₹104 per share. The bank’s strategic moves post-merger and its increased market share position it as an attractive option for investors seeking growth.
IDFC First Bank’s Target Price and Potential Returns
As of December 22, 2023, IDFC First Bank’s stock closed at ₹88.40, and with the target price set at ₹104 per share, investors could potentially enjoy a return of approximately 18% from the current market price. The bank has already demonstrated impressive performance, with a 45% return in 2023 and a notable 13-14% increase in the past six months.
Centrum Broking’s Positive Outlook
Centrum Broking’s analysis highlights the positive trajectory for IDFC First Bank post-merger with Capital First. The bank has expanded its market share in both advances and deposits, setting the stage for sustained growth. Management is optimistic about witnessing robust advances growth in the coming years, further fueled by an expected reduction in interest rates that could lower the cost of funds.
Projections for IDFC First Bank
The brokerage anticipates a promising future for IDFC First Bank, projecting a Compound Annual Growth Rate (CAGR) of 29% for Net Interest Income (NII), 33% for Pre-Provision Operating Profit (PPoP), and 34% for Profit After Tax (PAT) during FY23-26E. These projections underscore the bank’s potential to deliver strong financial performance in the coming years.
In conclusion, Centrum Broking’s endorsement of IDFC First Bank as a BUY and the ambitious target price of ₹104 per share suggest a compelling investment opportunity. Investors looking for a bank with a growth-oriented strategy and favorable market conditions may find IDFC First Bank an attractive addition to their portfolios.
