IDFC First Bank Q3 results 2025 out. Should you buy IDFC First Bank shares? | Stock Market News

IDFC First Bank Q3 Results: IDFC First Bank announced Q3FY25 earnings on January 25 (Saturday), reporting a sharp drop of 53 per cent in standalone net profit to ₹339.4 crore, dragged by increased provisions due to higher loan slippages, compared to ₹715.7 crore in the corresponding period last year.

The private sector lender was formed by merging the banking arm of project financer Infrastructure Development Finance Company (IDFC) and Capital First. The bank said its profit was impacted by reduced income from slowing down the disbursal of micro-finance (MF) loans, an increase in microfinance provisions, and the normalization of credit costs of non-MF businesses.

IDFC First Bank Q3 Results: Key Metrics

IDFC First Bank’s net interest income (NII)—the difference between interest earned and paid—rose 14.4 per cent to ₹4,902 crore compared to ₹4,286.6 crore in the year-ago period. The total income increased to ₹11,123 crore during the quarter from ₹9,396 crore in the same period a year ago.

Sequentially, the net profit grew by 69 per cent from ₹201 crore in the preceding September quarter of FY25. The 9M-FY25 net profit decreased by 45.3 per cent on a year-on-year (YoY) basis. Customer deposits increased 28.8 per cent YoY from Rs. 1,76,481 crore as of December 31, 2023, to Rs. 2,27,316 crore as of December 31, 2024.

Loans and Advances (including credit substitutes) increased by 22 per cent YoY from Rs. 1,89,475 crore as of December 31, 2023, to Rs. 2,31,074 crore as of December 31, 2024. Microfinance portfolio as percentage of overall loan book reduced from 5.6 per cent in Q2FY25 to 4.8 per cent in the December quarter.

“Our bank continues to grow well on loans and deposits. Our customer deposits are growing strongly at 29 per cent YoY to reach Rs. 2,27,316 crore, with the CASA ratio sustaining at 48 per cent. The loans and advances grew steadily by 22 per cent YoY to reach Rs. 2,31,074 crore,” said V Vaidyanathan, MD and CEO of IDFC First Bank.

IDFC First Bank Q3 Results: Should you buy, sell, or hold the stock?

Market expert Abhishek Pandya, Research Analyst at StoxBox noted that IDFC First Bank reported a subdued performance in Q3FY25, with PAT declining by 53 per cent. “This decrease was primarily due to an increase in provisions for microfinance and the normalization of credit costs in non-microfinance businesses. Additionally, the net interest margin experienced a compression of 14 bps on a QoQ basis, attributed to the microfinance sector and a rising proportion of the Wholesale Banking business,” Pandya added. 

He however noted that despite these challenges, credit growth remained robust at 22 per cent YoY, and IDFC FB has reduced its microfinance portfolio to 4.8 per cent from 5.6 per cent in Q2FY25. “The NPA ratio has improved, and we will closely monitor the management’s comments regarding asset quality. Further, IDFC FB operating income saw strong growth, driven by investment income, and the wealth management business continues to thrive,” as per Pandya.

“Overall, IDFC First Bank’s performance delivered a muted quarterly performance and was largely affected by the microfinance segment. A key monitorable going forward will be the management’s strategy on concerning MFI loan portfolio and margin stability,” he said.

Technical View

According to Mahesh M Ojha, AVP — Research at Hensex Securities, “IDFC First Bank has delivered weak Q3 results, and the banking stock may witness some selling pressure on Monday. I would suggest a buy-on-dip strategy to investors who are willing to buy IDFC First Bank shares. They can buy the stock in the ₹60 to ₹61.50 range for an immediate target of ₹64. On breaching above ₹64 on a closing basis, the stock may go up to the ₹68 piece mark.”

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