Mon Oct 28 09:12:15 UTC 2024: ## IDFC First Bank Shares Plunge After Profit Slumps 73%

**Mumbai, India -** IDFC First Bank Ltd. witnessed a sharp decline in its share price on Monday following the release of its September quarter results, which revealed a significant drop in net profit. The bank’s net profit plummeted by over 73% to Rs 201 crore compared to the same period last year, driven by a surge in provisions.

The bank attributed the steep decline to a significant increase in provisions, reaching Rs 1,732 crore, a substantial rise from Rs 528 crore a year ago. This surge in provisions was attributed to the exit of a long-standing client with an exposure of Rs 1,100 crore and a recognition of stress in the microfinance sector.

Despite the profit dip, the bank showcased positive growth in its net interest income, which rose by 21% to Rs 4,788 crore, propelled by a 22% increase in its loan book.

**CEO V Vaidyanathan** highlighted the bank’s proactive approach in addressing emerging challenges, stating, “We don’t buy quick solutions around these challenges. We always take our issues directly and recognise stress early.” He also emphasized the bank’s robust credit card portfolio, with only 1.4% of accounts 90 days past due, thanks to a lending strategy focused on customers with higher savings balances.

**Analyst Reactions**

Analysts reacted to the results with mixed opinions. While some maintained a “buy” rating, citing strong deposit growth and a balanced approach to navigating the current environment, others opted for a “neutral” rating due to the significant increase in credit costs and the impact on earnings.

**Market Impact**

IDFC First Bank shares took a hit on Monday, falling as much as 9.56% to Rs 59.24 apiece on the NSE. The stock was trading 3.04% lower at Rs 63.51 apiece by 10:22 a.m., compared to a 0.79% advance in the benchmark Nifty 50. The bank’s share price has declined significantly over the past year, falling 23.81% in the last 12 months and 28.76% on a year-to-date basis.

**Looking Ahead**

Despite the challenges, IDFC First Bank remains optimistic about its future, citing healthy growth across its retail and corporate loan segments. The bank’s performance will be closely watched as it navigates a challenging economic environment marked by rising interest rates and inflationary pressures.

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