Amidst the ongoing bull run in the stock market, several stocks are gearing up for new highs. Brokerage houses are advising to buy these stocks, and one such stock is from the private sector bank, IDFC First Bank (IDFC First Bank). Centrum Broking (Centrum Broking) has initiated coverage on the shares of IDFC First Bank with a BUY rating. Post the merger with Capital First, the bank has seen an increase in its market share.
IDFC First Bank: Shares to Touch ₹104
- Centrum Broking has started coverage on IDFC First Bank’s stock with a buy recommendation and set a target price of ₹104 per share.
- As of December 22, 2023, the stock closed at ₹88.40, indicating a potential return of approximately 18% from the current price.
- The bank’s stock has returned about 45% so far in 2023, and it has risen by about 13-14 in the past six months.
Brokerage’s Opinion on IDFC First Bank
- After the merger with Capital First, IDFC First Bank has increased its market share in terms of both advances and deposits.
- The bank is set for a long journey of growth ahead. The management is confident that in the coming years, the bank can witness robust growth in advances.
- There is an expectation of a reduction in interest rates in the coming years, which could lower the cost of funds.
- In the first quarter of FY 2023, there was a 160bps increase in interest rates.
- The brokerage expects to see a CAGR of 29%/33%/34% in NII/PPoP/PAT during FY23-26E.
This analysis and recommendation by Centrum Broking highlight a significant opportunity for investors to participate in the growth story of IDFC First Bank. The bank’s strategic initiatives post-merger and favorable market conditions present a promising outlook for its shares.
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