IDFC First Bank shares jump 9% after highest price target from Investec, CLSA upgrade

Brokerage firm CLSA has upgraded its rating on Mumbai-based private lender IDFC First Bank Ltd. on Monday, July 27, after the lender reported its June quarter results over the weekend. Other bullish analysts tracking the lender have also raised their respective price targets on the stock. The stock has jumped 9% in early trading in response.

CLSA has upgraded its rating on IDFC First Bank to "outperform" from its earlier rating of "hold", and has raised its price target to ₹95 from ₹73 earlier. The revised price target implies an upside potential of 19% from current levels.

The brokerage said that IDFC First Bank has bounced back strongly after the Haryana incident with deposits growing by 18% from last year and CASA ratio also improving by nearly 300 basis points to an industry-leading 51%.

CLSA highlighted IDFC First's improving asset quality as a key positive, with a sharp decline in gross and net slippage ratios.

Nomura Raises Target On IDFC First Bank

Nomura has also raised its price target on IDFC First Bank to ₹95 apiece from ₹85 after its June quarter results.

The brokerage has also raised its financial year 2027 and 2028 Earnings Per Share (EPS) estimates by 9% and 17% respectively.

IDFC First Bank's growth tailwinds remain intact with the impact of the ECL provisions being manageable, and the CGFUM recovery being used to create buffers, Nomura said.

The brokerage further wrote that while operating leverage is visible, the Return on Assets (RoA) this year will be led by credit cost improvement.

Investec Gives IDFC First Its Highest Target

Brokerage firm Investec given IDFC First Bank its highest price target on the street, raising it to ₹115 from ₹96 earlier.

Investec is also one among the only two analysts who have a price target in excess ₹100 per share for IDFC First Bank.

The brokerage is betting on its improving asset quality, lower credit cost guidance and continuing growth momentum behind its bullish stance.

IDFC First Bank's FY27 Guidance

For the current financial year, IDFC First Bank expects loan growth to be 20% year-on-year, Return on Assets to be around 1%, Margin guidance has been raised to 5.8%, while the Credit Cost guidance has been lowered to 150 basis points to 160 basis points.

The Microfinance book has bottomed out, according to the management and is targeting a 15% growth in the MFI book this year.

Is IDFC First Bank Is A Buy Or Sell?

Among the 27 analysts who have coverage on IDFC First Bank, 17 of them have a "buy" rating, six say "hold" and four of them have a "sell" rating on the stock.

Shares of IDFC First Bank are trading 8.3% higher on Monday at ₹87.35. As a result of this upmove, the stock has also turned positive on a year-to-date basis.