HSBC bets on this private sector lender for 26% upside; Check price target

Shares of IDFC First Bank Ltd. will remain in focus on Tuesday, June 9, after brokerage firm HSBC initiated coverage on the private lender with a "Buy" rating.

The brokerage has set a price target of ₹90, implying an upside of more than 26% from Monday's closing price of ₹71.22.

HSBC said IDFC First Bank offers a play on multi-year loan growth and operating leverage across its business segments, with recent execution giving it confidence in the lender's growth trajectory.

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The brokerage expects the bank's core pre-provision operating profit (PPOP) to grow at a compound annual growth rate (CAGR) of 35% between financial year 2026 and 2029, supported by strong loan growth and improving profitability metrics. It also forecasts expansion in both return on assets (RoA) and return on equity (RoE) over the period.

According to HSBC, the bank has two key value drivers. The first is its ability to grow advances at a CAGR of around 20% between FY26 and FY29. The second, and more important factor, is operating leverage, which the brokerage believes will support stronger earnings growth as revenue scales faster than costs.

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These factors are expected to drive a robust earnings trajectory for IDFC First Bank, with HSBC forecasting a strong EPS CAGR over FY26-FY29.

However, the brokerage flagged a few risks. A failure to meet cost guidance could pressure valuations, while continued capital infusions may weigh on return ratios. HSBC said Return on Equity (RoE) will need to improve meaningfully for the stock to command higher valuation multiples.

According to Bloomberg analyst data, 15 of the 28 analysts tracking IDFC First Bank have a "buy" rating on the stock, while eight recommend "hold" and five have "sell" ratings. The stock has a consensus target price of ₹76.66, indicating a potential upside of about 7.3% from current levels.

Shares of IDFC First Bank ended 1.56% lower at ₹71.22 on Monday. The stock is down nearly 17% so far in 2026.