IDFC First Bank is a new-era bank established in 2018. The bank has aggressively grown around the country in the past 5 years with total customer deposits increasing at 36% CAGR in the last 4 years, reaching 136,812 crores.
IDFC First Bank holds assets worth approximately Rs 239,882 crore and boasts a widespread network of 800+ branches and 900+ ATMs across India.
If you are also interested in exploring IDFC First Bank’s stock, let’s discuss IDFC First Bank’s share price target by 2030 in detail based on the fundamental analysis, technical analysis, and experts’ views on the banking stock.
IDFC First Bank Share Price Target 2030
IDFC First Bank’s share price is trading above Rs 95 as of now. The bank stock has given an outstanding return of 87% in the last 1 year.
We have divided this section into two parts – IDFC First Bank Share Price Target 2025 and 2030 to give you a better perspective.
#1. IDFC First Bank Share Price Target 2025
As you can see IDFC First Bank has delivered an impressive compound annual growth rate (CAGR) of 45% in its stock price in the last 3 years, leaving investors pleasantly surprised.
Stock market experts are bullish about IDFC First Bank’s share price keeping the momentum and will reach Rs 150 by 2025.
#2. IDFC First Bank Share Price Target 2030
According to experts at Equitymasters, after being stagnant for almost a decade, the Indian banking sector started to do better. Big companies also started paying back their debts, which was good for the banks and more people started putting money in the banks.
As you know banks are the backbone of the economy and when the economy grows, banks also rise. Indian government’s efforts to boost the entire country’s economy are expected to continue. Govt’s ongoing financial support to the banking sector will make these banks more self-reliant and resilient.
The consensus price target for IDFC First Bank shares by 2030 stands at approximately Rs 310.
Fundamental Analysis of IDFC First Bank
#1. Loan Portfolio Diversity
The composition of IDFC Bank’s loan portfolio, with 63% in retail loans, 5.2% in infrastructure loans, and 31.8% in corporate and other loans, signifies a strategic business vision that emphasizes diversification and risk management.
- Focus on Retail Banking: IDFC Bank emphasizes retail loans (63%), demonstrating a commitment to serving individual consumers with products like personal loans, home loans, and auto loans.
- Risk Mitigation: The bank limits exposure to infrastructure loans (5.2%) to mitigate potential risks associated with these longer-term and cyclical loans.
- Corporate Lending: IDFC Bank allocates a significant share (31.8%) to corporate and other loans, showcasing support for business growth, including small and medium-sized enterprises (SMEs) and larger corporations.
#2. Revenue Growth
IDFC First Bank has consistently shown positive signs in revenue generation. Over the past five years, the bank has maintained an average annual revenue growth rate of 20% (with a slight dip in 2020-21 due to COVID-19), which shows the bank has grown its business consistently.
#3. Profit Growth
From a huge loss of Rs -2800 crores in 2019-20 (during the pandemic) to achieving a net profit growth of 43% over the last three years, IDFC First Bank is flexing its muscles in the banking arena.
#4. NPA, ROE & Other Important Factors
I. Non-performing Assets (NPA)
In terms of non-performing assets (NPAs), IDFC First Bank has made remarkable strides. The gross NPA ratio plummeted from 1.86% in 2021 to an encouraging 0.86% in 2023, showing their commitment to asset quality improvement.
II. ROE and ROA
While the stock’s return on equity (ROE) has been impressive in the last 1 year at 10.44%, if you check out for the last 3-year performance, it is low at 4.64%.
On the other hand, after a dip in 2020 during the pandemic, the return on assets (ROA) has been on a steady rise, currently standing at 1.13%.
III. Net Interest Margin (NIM)
NIM is the difference between what interest a bank is paying for its borrowed money and what interest it is charging for lending the money.
IDFC First Bank’s NIM has been growing impressively for the last 5 years. In 2019, it was at 2.0%, and by 2023, it had grown to 5.57%. That’s a remarkable 177.5% increase in just 5 years.
Now you can say that the bank is making more money from its lending and investments.
#5. Peers Comparison
IDFC First Bank has surpassed big banks like HDFC Bank and ICICI Bank in terms of stock performance in the last 1-year and its fundamentals also seem strong (discussed in the previous sections).
IDFC First Bank has given almost 90% return, whereas HDFC Bank and ICICI Bank both have given merely 8% to 9% return in one year.
But if you check out other factors like profitability, then IDFC First Bank is lagging behind its peers in overall profit gains from the business which is somehow showing a red flag. You can see that IDFC First Bank has a low profit margin as compared to the peers mentioned below.
IDFC First Bank also has a lower ROE as compared to other new-age banks like AU Small Finance Bank and Federal Bank. You can check out a detailed comparison of IDFC First Bank with major competitor banks below –
IDFC First Bank’s Technical Analysis
#1. Moving Averages
The stock is sending strong signals with 9 out of 11 Moving Averages suggesting buy signals against only one neutral and one sell signal.
You can see in above snapshot that the stock is riding high above both the 50-day and 200-day moving averages, suggesting a strong bullish trend.
#2. Oscillators
Out of 11 oscillators, 6 are showing a neutral signal. IDFC First Bank’s RSI(14) is also in a neutral spot, hovering above 79, indicating the stock could be in the overbought zone.
An RSI above 70 is considered overbought, suggesting that the stock may be due for a potential reversal or correction in the near term.
Factors that May Shape IDFC First Bank’s Growth
- Expanding Loan Portfolio – With its diversified loan portfolio and a focus on corporate and retail lending, IDFC First Bank is well-positioned to capitalize on lending opportunities, potentially boosting interest income and overall profitability.
- Digitalization Efforts – IDFC First Bank is embracing the digital age, revamping its customer experience and operational efficiency. They’re likely to attract a bigger customer base if they keep on improving their online customer experience.
- Economic Conditions – Just Like all banks, IDFC First Bank’s performance hinges on macroeconomic factors like GDP growth, inflation rates, and interest rate movements. Positive economic conditions can propel borrowing and lending activities, potentially boosting the bank’s financial performance.
Conclusion
According to the stock market experts, the consensus price target for IDFC First Bank shares by 2030 is hovering around INR 310.
But remember you should stay informed, watch market trends, and analyze relevant factors to make informed investment decisions.
You can also read about other stocks’ target prices –
FAQs
Analysts consider a range of factors, including the bank’s historical performance, earnings projections, economic conditions, and industry trends. They use financial models and analysis to estimate future share prices.
It’s challenging to predict a bank’s share price with absolute certainty for a specific year due to the complexity of financial markets and unforeseen events. Share price targets are educated estimates and subject to change.
Factors that can influence IDFC First Bank’s share price in the long term include its financial performance, loan portfolio quality, economic conditions, interest rates, regulatory changes, and overall market sentiment.
