IDFC First Bank shares declined 0.34 per cent to ₹70.94 in Monday morning trade despite reporting mixed first-quarter results that showed strong business growth overshadowed by elevated credit costs. The stock traded in a range of ₹69.23-₹71.55 with heavy volumes of 233.44 lakh shares worth ₹164.71 crore by 11.50 AM.
The private sector lender reported net interest income of ₹49.5 billion for Q1FY26, up 5.3 per cent year-on-year but below analyst expectations of ₹53.2 billion.
Net profit stood at ₹4.64 billion, declining 28 per cent annually due to higher provisioning costs of ₹16.6 billion. The bank maintained robust loan growth of 20 per cent and deposit growth of 26 per cent year-on-year.
Asset quality concerns emerged as gross non-performing assets rose 10 basis points quarterly to 2.0 per cent, with gross slippages hitting a nine-quarter high of 4.19 per cent annualized. The microfinance segment contributed significantly to stress, though the bank reduced its MFI book by 37 per cent year-on-year to ₹8,354 crore.
Centrum Broking maintained its ‘Reduce’ rating with a revised target price of ₹63, citing margin compression and sustained credit cost pressure. Net interest margins fell 24 basis points quarterly to 5.71 per cent, with management expecting further pressure in Q2 due to rate transmission effects.
The bank’s cost-to-income ratio improved to 68.7 per cent from 73.6 per cent in the previous quarter, helped by controlled operating expense growth of 11.5 per cent year-on-year.
Published on July 28, 2025