1. At a Glance
IDFC First Bank’s Q1 FY26 profit slumped 29% YoY, making investors wonder if the capital raise of ₹7,500 Cr is a lifeline or a luxury. Revenue grew, but NPAs are lurking, and ROE barely scratches 4%.
2. Introduction with Hook
Picture a car with a turbo engine but flat tyres – that’s IDFC First Bank. The growth engine is roaring with deposits and branches, but profitability keeps hitting speed breakers.
Key Stats:
- Q1 Net Profit: ₹453 Cr (vs ₹643 Cr LY)
- Revenue: ₹9,642 Cr (+10% YoY)
3. Business Model (WTF Do They Even Do?)
The bank lends to retail, MSMEs, and corporates, while offering deposits and digital banking products. They’re trying to be HDFC’s younger cousin with credit cards, FASTags, and home loans. Problem? They still burn cash to keep up appearances.
4. Financials Overview
- Revenue (TTM): ₹37,355 Cr
- Net Profit (TTM): ₹1,301 Cr (↓54%)
- ROE: 4.2%
- ROCE: 6.2%
Other income (₹2,227 Cr this quarter) is their oxygen mask.
5. Valuation
- Market Cap: ₹51,858 Cr
- P/E: 39.8 (premium for a bank crawling on ROE)
- P/B: 1.34
- Dividend Yield: 0.35%
Fair Value Range? ₹55–₹65 unless profitability improves.
6. What’s Cooking – News, Triggers, Drama
- Fundraise of ₹7,500 Cr approved (Warburg Pincus, ADIA onboard).
- RBI and CCI cleared Currant Sea’s 9.99% stake.
- FY25 PAT ₹1,525 Cr (+6% YoY).
- Loan growth strong, but margins compressed and profits dipped.
7. Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Total Assets | 3,43,909 |
| Deposits | 2,52,010 |
| Borrowings | 38,984 |
| Net Worth | 38,156 |
Funding is solid, but contingent liabilities of ₹4.4 lakh Cr raise eyebrows.
8. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 11,543 | 14,465 | 14,465 |
| Investing | -9,887 | -3,174 | -3,174 |
| Financing | -2,954 | -8,673 | -8,673 |
Steady ops cash, but financing cash bleed is evident.
9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 4.2% |
| ROA | 0.46% |
| NIM | ~5.1% |
| P/B | 1.34 |
| D/E | Low for a bank |
Stressy – low returns and high valuations don’t mix well.
10. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 30,325 | 36,502 | 37,355 |
| PAT | 2,942 | 1,490 | 1,301 |
PAT halved in two years – ouch.
11. Peer Comparison
| Bank | Revenue (₹ Cr) | PAT (₹ Cr) | P/E | ROE |
|---|---|---|---|---|
| HDFC Bank | 3,42,193 | 70,575 | 22 | 14.5% |
| ICICI Bank | 1,90,829 | 52,891 | 20 | 18% |
| Axis Bank | 1,28,564 | 27,862 | 12 | 16% |
| IDFC First | 37,355 | 1,301 | 40 | 4.2% |
Looks like the underdog at a bankers’ party full of billionaires.
12. Miscellaneous – Shareholding, Promoters
- Promoters: 0% (post merger, IDFC exited)
- FIIs: 23.8%
- DIIs: 23.4% (rising)
- Public: 43.6%
Big boys (Warburg, ADIA) joining, but retail holds the risk.
13. EduInvesting Verdict™
IDFC First Bank is like that startup which scaled fast but still bleeds. The capital raise gives it runway, but investors need patience. Growth story intact, profit story pending.
Written by EduInvesting Team | 26 July 2025
Tags: IDFC First Bank, Q1 FY26, Fund Raise, EduInvesting Premium
