Mehabe score: 3 G Factor: 2 Piotski Score: 6 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 6.
Description
IDFC First Bank is engaged in the business of Banking Services. IDFC FIRST Bank was founded by the merger of Erstwhile IDFC Bank and Erstwhile Capital First on December 18, 2018.
Main Points
Ratios
Capital Adequacy Ratio – 14.33%#
Net Interest Margin – 4.65%#
Gross NPA – 1.33%
Net NPA – 0.33%#
CASA Ratio – 48.31%Site:IDFCFIRSTBMain Symbol:IDFCFIRSTB
Stock trades at 52.0, below its 50dma 54.74. However it is trading above its 200dma 49.97. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 54.74.
The 52 week high is at 69.30 and the 52week low is at 26.00
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -3.42%
– has a low return on equity of -8.92% for last 3 years.
-Contingent liabilities of Rs.281368.59 Cr.
Competition
– The industry trades at a mean P/E of 19.4x. IDFC First Bank trades at the industry’s max P/E of 71.41x. IDFCFIRSTB trades at a P/E of 71.4x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 6.0. IDFCFIRSTB has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is -2.7%. The max 1- month return was given by ICICI Bank: a return of 8.19 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 4089.0 cr compared to Rs 3831.0 cr for period ended Jun 2020, a rise of 6.7%
Operating Profits reported at Rs 3911.0 cr for period ended Jun 2021 vis-vis 1983.0 for period ended Jun 2020 .
Operating Margins expanded 4388.5 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs -1.02 compared to Rs 0.23 for previous quarter ended Mar 2021 and Rs 0.16 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 15984.0 cr for period ended TTM vis-vis sales of Rs 15968.0 cr for the period ended Mar 2021, a growth of 0.1%. The 3 year sales cagr stood at 10.2%.
Operating margins shrank to -3147.0% for period ended TTM vis-vis -1778.0% for period ended Mar 2021, contraction of 136900.0 bps.
Net Profit reported at Rs -271.0 cr for period ended TTM vis-vis sales of Rs 452.0 cr for the period ended Mar 2021, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 14061.0 cr for period ended Mar 2021 vis-vis Rs 10927.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 3.0% compared to -9.0% over the last 3 Years. – The stock has given a return of 95% on a 1 Year basis vis-vis a return of 10% over the last 3 Years. – The compounded sales growth on a TTM bassis is 1% vis-vis a compounded sales growth of 21% over the last 3 Years. – The compounded profit growth on a TTM basis is 116% vis-vis a compounded profit growth of -19% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has risen for the period ended Jun 2021. The Jun 2021 fii holding stood at 15.09% vis-vis 11.88% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 32.21% vis-vis 32.31% for Mar 2021
Conclusion
– – has low interest coverage ratio.
-Promoter holding has decreased over last quarter: -3.42%
– has a low return on equity of -8.92% for last 3 years.
-Contingent liabilities of Rs.281368.59 Cr.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 54.74 and is trading at 52.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
