IDFC First Bank shares jumped nearly 6% to a high of Rs 65.20 in intraday trade on Tuesday on strong volume as net profit jumped more than 100% in the fourth quarter.
The stock was up 3.8% at Rs 63.90 at 10:10 am, with about 43.11 lakh shares traded compared with the BSE’s two-week average of approximately 26.80 lakh shares. Meanwhile, the S&P BSE Sensex rose 0.6% to 61,450.
Last month, the stock rose more than 11.5%, compared with a gain of about 4% for the benchmark BSE index.
For the quarter ended March 2023, IDFC First Bank reported strong growth of 134.2% in net profit to Rs 802.62 crore in the fourth quarter, compared to Rs 342.73 crore a year earlier. Total revenue rose 45.3% YoY to Rs 7,821.83 crore.
IDFC First Bank expects the net interest margin (NIM) to trend down and remain at 5-5.5% for the current and next financial year. The margin for Q4FY23 is 6.05%.
V Vaidyanathan, MD and CEO of IDFC First, told Business Standard that costs would catch up with the repricing of deposits. Costs were passed on to customers in FY23 following repo rate hikes. However, there has been no commensurate increase in costs for banks. It will take about a year for costs to catch up. The private lender reported a NIM of 5.96% for FY22.
In addition, the Bank’s Board of Directors has also approved a proposal to borrow up to Rs 5,000 crore through the issuance of debt instruments, including but not limited to unsecured, callable, non-convertible bonds, debentures or such other debt in one or more forms Securities Instalments.