IDFC First Bank Faces Volatility Amid Declining Financial Performance and Low Credit-Deposit Ratio

IDFC First Bank has experienced significant volatility, reaching a new 52-week low of Rs. 53.12 today. The stock has been on a downward trend, underperforming its sector by 1.16% and recording a decline of 8.08% over the past week. Currently, IDFC First Bank is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, indicating a bearish technical outlook.
In terms of financial performance, the bank reported a notable decrease in key metrics for December 2024, with a profit before tax (PBT) of Rs. -1,358.83 crore, down 53.6%, and a profit after tax (PAT) of Rs. 339.43 crore, down 41.5%. The credit-deposit ratio stands at a low of 94.19%, reflecting challenges in its lending practices.

Despite these setbacks, IDFC First Bank maintains a low gross non-performing asset (NPA) ratio of 1.94% and has demonstrated strong long-term fundamentals, with a compound annual growth rate (CAGR) of 21.21% in net profits. The stock's valuation remains attractive, trading at a discount compared to its peers, supported by high institutional holdings at 52.42%. However, the overall performance over the past year has been disappointing, with a return of -32.13%.