Mumbai-Based Bank Whose Stock Trades Below Rs 100, Earns Q3 Profit Of Rs 716 Crore

Mumbai-headquartered IDFC First Bank reported double-digit growth in Q3 earnings for FY24. This private bank stock is trading below Rs 100. In Q3FY24, IDFC First reported an 18% growth in net profit to Rs 716 crore compared to a profit of Rs 605 crore in the same quarter of the previous year. Net interest income (NII) climbed by a whopping 30% to Rs 4,287 crore in Q3FY24 as against Rs 3,285 crore in Q3 of FY23.

In the quarter, net interest margins stood at 6.42%, expanding from 6.13% in Q3FY23 and 6.32% in Q2-FY24. While provisions were at Rs 655 crore, increasing by 45% YoY from Rs 450 crore in Q3FY23.

In terms of asset quality, gross NPA stood at 2.04%, cooling off from gross NPA of 2.96% in Q3FY23. The net NPA (NNPA) of the bank has improved to 0.68% as of December 31, 2023, from 1.03% on December 31, 2022.

The Bank has exceeded, met, or is most likely to meet most targets as provided under Guidance 1.0.

In its financial report, IDFC First Bank said, We have a strong proven business model that is incrementally very profitable. Basis this model, we could make necessary investments and expenses for building the Bank, and yet grow profitability during FY 19-24. We have far greater visibility while providing Guidance 2.0 as compared to the visibility of at the time of Guidance 1.0."

Also, V Vaidyanathan, Managing Director and CEO, of IDFC FIRST Bank, said, "At the time of the merger of IDFC Bank and Capital First, the Bank provided Guidance 1.0. As of 31st December 2023, IDFC FIRST Bank has completed exactly 5 years post the merger and hence we are providing Guidance 2.0 (FY 24-29), with greater visibility as compared to the visibility we had at the time of providing Guidance 1.0. We are likely to meet most targets under Guidance 1.0."

Further, IDFC First added, "We are building a world-class bank with the highest levels of corporate governance, a consistent balance sheet growth of ~20%, with strong asset quality of GNPA

Other key highlights of Q3FY24:

- Core Operating Profit (pre-provision operating profit excluding trading gains) grew by 24% YOY from Rs. 1,225 crore in Q3-FY23 to Rs. 1,515 crore in Q3-FY24.

- RoA (annualized) stood at 1.16% for 9M-FY24. RoE (annualized) stood at 10.67% in 9M-FY24.

- Customer Deposits increased by 42.8% YoY from Rs. 1,23,578 crore as of December 31, 2022, to Rs. 1,76,481 crore as of December 31, 2023.

- CASA Deposits grew by 28.6% YoY from Rs. 66,498 crores as of December 31, 2022, to Rs. 85,492 crore as of December 31, 2023. CASA Ratio stood at 46.8% as of December 31, 2023.

- Retail deposits grew by 46.6% YoY from Rs. 95,107 crores as of December 31, 2022, to Rs. 1,39,431 crores as of December 31, 2023.

- Retail deposits constitute 79% of total customer deposits as of December 31, 2023.

- Legacy High Cost Borrowings reduced from Rs. 18,762 crores as of December 31, 2022, to Rs. 13,607 crores as of December 31, 2023.

- The Bank continues to wind down infrastructure financing as per the stated strategy and now constitutes only 1.6% of total funded assets as of December 31, 2023.

- Exposure to top 20 single borrowers improved to 5.93% as of December 31, 2023.

- The Credit Deposit Ratio improved further from 109.18% as of December 31, 2022 to 101.41% crore as of December 31, 2023. The incremental Credit Deposit ratio for quarter 9M-FY24 was 79.89%.

- GNPA of the Retail, Rural and SME Finance has improved to 1.45% as of December 31, 2023, from 1.87% on December 31, 2022.

- Excluding the infrastructure financing book which the Bank is running down, the GNPA and NNPA of the Bank would have been 1.66% and 0.47% respectively as of December 31, 2023.

- Capital Adequacy of the Bank was strong at 16.73% with a CET-1 Ratio of 13.95% as of December 31, 2023. The Bank raised fresh equity capital of Rs. 3,000 crore in 1st week of October 2023.

The average LCR was strong at 121% for the quarter ending on December 31, 2023.

On BSE, IDFC's First share price ended at Rs 87.67 apiece, up 2.3% with an m-cap of Rs 61,954.78 crore on Saturday.

IDFC FIRST is a new-age bank that works in the best interest of its customers. IDFC FIRST Bank is the first bank to offer monthly credit in savings accounts. The bank's credit cards have unique features such as lifetime free, never-expiring rewards points, zero interest on cash withdrawal at ATMs and low APR, so customers incur less fees on its Credit Cards.