Mon Oct 28 16:21:05 UTC 2024: ## IDFC First Bank Shares Plunge After Profit Slump
**Mumbai, October 28, 2024:** Shares of IDFC First Bank plummeted over 9% in early trading on Friday after the bank reported a significant decline in its quarterly profit. The lender’s standalone net profit for the September quarter dropped by 73% to Rs 200.7 crore compared to Rs 751 crore in the same period last year.
Despite a 21% increase in Net Interest Income (NII) to Rs 4,788 crore, the bank’s profit was heavily impacted by a surge in provisions, which stood at Rs 1,732 crore, primarily due to a “prudent provisioning buffer” of Rs 568 crore.
While the bank’s asset quality showed improvement with gross Non-Performing Assets (NPAs) declining to 1.92% from 2.11% a year ago, analysts remain cautious about the bank’s performance. Nuvama Institutional Equities retained its ‘add’ rating but cut its target price to Rs 60 from Rs 72, citing the deterioration in Microfinance (MFI) asset quality.
Motilal Oswal reiterated its ‘neutral’ call on the bank and maintained its price target of Rs 73 per share. The brokerage highlighted the bank’s robust deposit growth and improvement in CASA mix, but expressed concerns about the elevated cost-to-income (C/I) ratio, which is expected to remain high in the near term.
The sharp decline in IDFC First Bank’s profit has raised concerns among investors, leading to the significant drop in its share price. The bank’s future performance will depend on its ability to manage expenses, improve asset quality, and maintain its deposit growth momentum.
First Piper 