IDFC First Bank down 5% on profit booking

IDFC First Bank dropped nearly 5 percent in the early trade on profit-booking on October 30 after reporting strong profit growth in the September quarter of the current financial year.

The private sector lender reported a 35 percent on-year rise in net profit at Rs 751 crore, driven by strong growth in core operating income, which was up 35 percent.

The bank’s net interest income came in at Rs 3,950 crore, up 32 percent over the year-ago period. Its net interest margin expanded 49 basis points (bps) to 6.32 percent.

The bank’s gross non-performing assets (NPA) falling 6 bps QoQ to 2.11 percent and net NPAs declining 2 bps to 0.68 percent for the quarter.

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One basis point is one-hundredth of a percentage point.

IDFC First Bank stock has been assigned an “equal-weight” rating with a revised target price of Rs 90 a share by Morgan Stanley.

In the September quarter, the bank showed robust performance on margins and volume growth. Asset quality saw some weakness with gross slippages higher QoQ. The asset quality is expected to recover in H2FY24, the management said.

IDFC First Bank has given a return of 35.79 percent over the past six months, while the benchmark Nifty Bank index has lost 1.32 percent of its value during the same duration.

At 9.46 am, IDFC First Bank, which closed at Rs 86.05 on October 27, was trading 4.82 percent lower at Rs 81.85 on NSE.

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