Jefferies has reaffirmed a ‘buy’ recommendation on IDFC First Bank, citing various growth opportunities, particularly in its credit cards business. Analysts at Jefferies have set a target price of Rs 100 per share, indicating a potential upside of 22 percent from the current levels.
Although the stock has faced a decline of over 6 percent year-to-date, underperforming the benchmark Nifty, Jefferies remains optimistic about its prospects. Previously, IDFC First Bank shares reached a 52-week high of Rs 100 per share on September 5, 2023.
According to Jefferies, achieving a return on asset (RoA) of 1.5 percent will be pivotal for IDFC First Bank’s re-rating, which they anticipate happening from the second half of FY25 onwards.
The brokerage emphasizes the bank’s strengths in deposit franchise, technology platform, and distribution network. It sees potential growth drivers from the turnaround of its credit cards business and the benefits of expanding new branches.
Key factors for potential re-rating include margin expansion, bolstering of the deposit franchise, favorable cost trends, and improvement in credit quality, as highlighted by the brokerage.
IDFC First Bank is recognized for its comprehensive banking platform, competitive rates, and robust technology. Notably, its urban presence has facilitated substantial growth in retail deposits, positioning it as one of the fastest-growing banks.
The bank has strategically expanded its lending operations into retail, rural, and SME sectors while diversifying its corporate portfolio beyond infrastructure loans.
Disclaimer: The investment views expressed by Jefferies and other experts are their own and not endorsed by LegalParivar.com. Investors are advised to consult certified experts before making any investment decisions.
