IDBI Bank Ltd. is Rated Buy by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO’s 'Buy' rating for IDBI Bank Ltd. indicates a positive outlook on the stock’s potential for capital appreciation and value creation for investors. This recommendation is based on a comprehensive evaluation of the bank’s quality, valuation, financial trend, and technical indicators. The rating suggests that investors may consider accumulating shares, given the stock’s attractive risk-reward profile in the current market environment.

Quality Assessment

As of 11 January 2026, IDBI Bank’s quality grade is assessed as average. This reflects a stable operational foundation with prudent risk management practices. Notably, the bank maintains a robust Capital Adequacy Ratio (CAR) of 18.72%, well above regulatory minimums, which provides a strong buffer against credit and market risks. Additionally, the bank’s Gross Non-Performing Assets (NPA) ratio has improved to a low 2.65%, signalling effective asset quality management and recovery efforts.

Valuation Perspective

The valuation grade for IDBI Bank is currently attractive. The stock trades at a Price to Book Value (P/BV) of 1.7, which is below the average historical valuations of its peer group, indicating a discount that may appeal to value-oriented investors. Furthermore, the bank’s Return on Assets (ROA) stands at a healthy 2.3%, underscoring efficient utilisation of its asset base to generate profits. The Price/Earnings to Growth (PEG) ratio of 0.3 further highlights the stock’s undervaluation relative to its earnings growth potential, making it a compelling proposition for long-term investors.

Financial Trend and Performance

Currently, IDBI Bank exhibits a positive financial trend. The company has demonstrated strong profit growth, with net profit increasing at an annualised rate of 31.01%. The latest quarterly results for September 2025 reinforce this momentum, with operating cash flow reaching a peak of ₹24,036.98 crores and dividend per share (DPS) at a record ₹2.10. Over the past year, the stock has delivered a remarkable 41.21% return, outpacing the broader BSE500 index and reflecting robust earnings growth of 44.4% during the same period. This combination of earnings acceleration and market outperformance supports the current 'Buy' rating.

Technical Outlook

The technical grade for IDBI Bank is bullish, indicating positive momentum in the stock price. Despite a minor one-day decline of 1.05% on 11 January 2026, the stock has shown resilience with gains of 8.55% over the past month and 13.21% over three months. The sustained upward trend suggests strong investor interest and confidence, which may continue to drive the stock higher in the near term.

Market Capitalisation and Sector Positioning

IDBI Bank is classified as a midcap stock within the private sector banking segment. Its market capitalisation and sector positioning provide a balanced mix of growth potential and stability. The bank’s improving fundamentals and valuation metrics position it favourably against peers, making it an attractive option for investors seeking exposure to the Indian banking sector’s growth story.

Summary for Investors

In summary, the 'Buy' rating assigned to IDBI Bank Ltd. by MarketsMOJO reflects a well-rounded assessment of the company’s current strengths and prospects. Investors should note that this rating was established on 30 December 2025, but the detailed analysis and financial data presented here are current as of 11 January 2026. The bank’s solid capital position, improving asset quality, attractive valuation, positive earnings trajectory, and bullish technical signals collectively underpin the recommendation. For investors seeking a midcap banking stock with a favourable risk-return profile, IDBI Bank presents a compelling opportunity.

Long-Term Performance and Outlook

The stock’s performance over the longer term has been impressive, with returns consistently beating the BSE500 index across one year, three years, and three months. This sustained outperformance is supported by the bank’s strategic initiatives to strengthen its balance sheet and improve operational efficiency. Investors can expect the bank to continue leveraging its capital adequacy and improving asset quality to drive growth in the coming quarters.

Risks and Considerations

While the current outlook is positive, investors should remain mindful of sector-specific risks such as regulatory changes, interest rate fluctuations, and macroeconomic factors that could impact banking operations. Additionally, the average quality grade suggests that while the bank is stable, there remains scope for improvement in operational metrics. Monitoring quarterly results and macroeconomic developments will be essential for assessing ongoing investment suitability.

Conclusion

Overall, IDBI Bank Ltd.’s 'Buy' rating by MarketsMOJO is well justified by its attractive valuation, positive financial trends, solid capital position, and bullish technical indicators. The rating update on 30 December 2025 reflects a confident stance on the stock’s potential, and the current data as of 11 January 2026 confirms the bank’s strong fundamentals and market performance. Investors looking for exposure to a midcap private sector bank with growth prospects and reasonable valuation may find IDBI Bank a suitable addition to their portfolio.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →