1. At a Glance – The Bank That Refuses to Die (or Become HDFC)
IDFC First Bank in Q3 FY26 just dropped a ₹503 crore PAT bomb (+48% YoY) and reminded everyone that this is not the zombie bank many wrote obituaries for in 2020. At a market cap of ~₹71,800 crore, CMP ₹83.6, and P/B of 1.53, the bank is no longer “cheap turnaround trash” but also nowhere near “premium private bank royalty.”
Loans stand tall at ₹2.42 lakh crore, deposits at ₹2.43 lakh crore, CASA at 46.9%, and GNPA down to 1.87%. Sounds solid, right? But then you look at ROE of 4.2% and the mood changes faster than a bull market WhatsApp group during RBI policy day.
The stock is up 32% YoY, profits grew 20% CAGR over 5 years, but valuation says “future superstar,” while return ratios still say “engineering college final-year project – under construction.”
So what is IDFC First Bank today?
A digital-first, retail-heavy, capital-hungry bank that’s cleaning its mess faster than expected—but charging investors upfront for hope. Curious? You should be.
2. Introduction – From Merger Hangover to Gym Body (Still Bulking)
Born out of the 2018 merger of IDFC Bank (infrastructure-heavy, low ROE) and Capital First (high-yield retail ninja), IDFC First Bank started life with more baggage than an Indigo flight during festive season.
Between FY19–FY21, the bank bled, restructured, wrote off sins, rebuilt systems, and shifted aggressively toward retail, granular deposits, and digital-first banking. The strategy was clear:
- Kill infra exposure
- Grow high-yield retail
- Build CASA like a PSU but behave like a fintech
Fast forward to FY25–FY26, and the results are finally visible. Asset quality improved, margins stabilized, and profits became
repeatable. But the cost? Capital dilution, low ROE, and investor patience.
This is not a story of instant gratification. This is a “suffer first, maybe enjoy later” bank. The question is: how long is “later”?
3. Business Model – WTF Do They Even Do?
Think of IDFC First Bank as a retail-first universal bank wearing a digital hoodie.
Core engines:
- Retail loans (82%) – mortgages, vehicles, MSME, consumer, rural
- Wholesale book (18%) – controlled, boring, and intentionally dull
- Granular deposits – retail deposits are 79% of total
- Digital distribution – app-first, branch-light, FASTag-heavy
They’ve intentionally reduced microfinance exposure to 4%, avoiding the classic retail-bank banana peel. Mortgages (29%) and consumer loans (25%) now form the stability base.
This is not a trading bank. Not an infra lender. Not a PSU clone.
It’s a retail compounding machine under construction.
But here’s the catch: retail banking scales beautifully only after ROE kicks in. And that engine is still warming up.
4. Financials Overview – Q3 FY26 Scorecard (Quarterly Results Locked)
Q3 FY26 vs Q3 FY25 vs Q2 FY26
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr | Prev Qtr | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 10,417 | 9,343 | 9,937 | 11.5% | 4.8% |
| PAT (₹ Cr) | 479 | 340 | 348 | 40.7% | 37.6% |
| EPS (₹) | 0.56 | 0.46 | 0.47 | 21.7% | 19.1% |
Annualised EPS (Q3
