IDFC First Bank Limited

Profit growth in my opinion is going to be much more than what you have assumed on account of replacement of high cost legacy borrowing , reduction in operating cost and profit from credit card business in additio to normal growth of banking business. I do not know about the share price ,but company is going to do very well in next 4 to 5 years


I would agree on mostly everything else, but this. I think its ulta.
Market is being cautious about this stock, and only factoring in what has happened in last quarter. Market is playing it quarter to quarter.

Reason: Retail lending is a slippery slope. NPA can spike. Many a bank has taken a hit. List is long.

Lately, i have been observing the energy with which VV sir appears on LinkedIN videos, and conf speeches. Also a flag.


It is good that from time to time somebody comes along on the thread and pushes back the expectations from the company as long as it is factual. In my opinion even at the time of merger it looked like a good bet and over the next three years it has become a much better and stronger bet. Last month it gave another opportunity to get in or add on at under 40 level.
After Q2 results are out and if they are on the same lines as previous three quarters, the upward price trend would get further consolidated till next quarter results.


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With a bloated equity of 620 cr after IDFC merger, hiw do you see growth prospect in long-term, to me it looks a long long term.

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@Gurvinder_Singh @Ragnar_Danneskjold
I feel valuations is very subjective and every investor has a different style while valuing a company. In my opinion we should be valuing a company on bad to average future performance. If we value on the best possible assumptions then it is going to be kind of risky.

I mentioned in my last point that even if I am wrong at one part the other part will balance off. Like if I take a profit of 4500cr in FY25 then the money raised at 100rs has a probability of only 5%. So the total dilution instead of 820cr will be 1020cr at 50rs. So 4.41 EPS and PE of 30 gives a price of 130. Again I am taking 30 as PE.

Now if IDFC is growing at 2x compared to industry in future and we are going to expect it will maintain same asset quality even at such high growth then that is also going to be risky.

IDFC has a provision coverage of 73% including technical write off at IndusInd size it will need to take it above 80% this is also going to eat profits.

My point is that we should not be projecting linear growth especially in banks because there is always uncertainty in future and I feel as of today above 60 is expensive.

Now as new quarterly performance comes in and it is better than most of my assumptions then I can increase my targets accordingly.

I feel most of the assumptions taken by me are pretty good and chances of bank outperforming all of those looks difficult as of today.


I think VV has a different game plan when building a Business which is not traditionally followed by most of others and hence not understood well or accepted Initially by the market.He did the same in Capital first.
His Style is build a sustainable model which is scalable for a long period.This model requires front loading of cost and it creates temporary depression in the profitability numbers.
This also creates doubts in the minds of many and the environment around is negative which I presume is the reason many leaders dont want to follow such models which creates lot of pressure for them.
The real product will only emerge later once the Model is built and ready to fly.

The Bank has completed the pain period and the journey has just began.The profitability numbers will surprise many since the Operating leverage has kicked in.We need 2-3 quarters of results for all to believe.
Interesting times ahead !


I am not a believer of predicting future in numbers …We should keep an eye on direction and momentum…and if any one of these go wrong then we can always exit the stock…
but still if we want to get a rough idea then my assumption would be like this,
going by current QoQ growth and applying a 25% growth on that IDFC First may increase its AUM by around 1.20 lakh crores in next 3 years…considering a conservative profit of 9000, the bank will need to raise 6000-7000 Cr. …at average price of 100 Rs number of shares will increase to 690 crores…
With a profit estimate of 4500 Cr. for F.Y. -25, EPS would be 6.5 rs and with a P/E of 30, stock price can be 195-200…
Bank can also use Tier 2 capital and AT-1 bonds to raise capital adequacy levels if I am not wrong, V vaidyanathan has mentioned it in recent past.


This time quarterly result a week earlier.
ae40ada3-efb5-4d1c-923e-a979baf27f0f.pdf (750.7 KB)


Bank Monthly account data is out.IDFC has continued his growth in both Credit and debit cards. Interestingly many banks have seen a month on month degrowth on both Debit and Credit cards.These includes some of the top banks.

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Spend Market share matters the most, as Bank doesn’t earn any fee income(All cards are issued LTF).

This should be seen in conjunction with the new credit card norms which state

  1. Newly acquired user should activate their credit card within 30 days of card issuance with a OTP consent.

  2. Cards unused for > 1 year period should be autoclosed after informing the customer.

And a bunch of other, details below:

Implementation deadline for above is extended to 1st October.
Some prudent banks might have already gone live with those rules and might have absorbed the impact.

October ending disclosures should give a better picture on #Cards market share for banks & True Average spend per card numbers.

For now, it makes sense to track growth based on spends market share.


IDFC first bank Spend Market share of Credit Card at different point of time.
August 2021 - 1.0288%
March 2022 - 1.1655%
August 2022 - 1.2597%



Q2FY23 CASA and other Updates:


Another set of epic results from IDFCF bank

  1. Casa engine does not wish to stop! 12% QoQ Growth. Wow. 64k casa now. 51.3% CASA
  2. 5.5% QoQ Growth in loan book
  3. SMA (indicative of asset quality) continues to shrink
  4. Mortgage biz leading the growth with 29% YoY Growth

Disc: Invested in IDFC & bank, biased


Latest interview, full of bullishness.

Disclosure: Invested