 "IDFC First rises as Nomura starts coverage with 23.5% upside forecast")
IDFC First Bank share price today: IDFC First Bank's share price reversed a two-day declining streak on Wednesday as global brokerage Nomura initiated coverage on the lender with a 'Buy' rating. It has assigned a target price of ₹105 per share, projecting a 23.5-per cent upside. The counter rose as much as 1.85 per cent to the day's high of ₹86.30 intraday on the National Stock Exchange (NSE). IDFC First Bank share price was trading 0.32 per cent higher at ₹85 as of 12:27 PM, as compared to 0.26 per cent decline in the Nifty 50 index. Nomura on IDFC First Bank
IDFC First Bank has a strong earnings momentum with improved return visibility, according to Nomura. The private lender has sustained loan growth, operating leverage, and moderating credit costs, which underpin a clear earnings inflection over the financial years 2026 and 2028, along with a material improvement in profitability.
Nomura expects IDFC First Bank to deliver a compound annual growth rate (CAGR) of 20 per cent in loans and 22 per cent in deposits over the financial years 2026 and 2028. The pre-provisioning operating profit (PPOP) could be at around 39 per cent during this period on the back of a 50-basis-point decline in asset costs and a 14-basis-point improvement in the net interest margins (NIMs), it said.
Further, IDFC First Bank's credit cost may fall by 35 basis points, which may lift the return on asset (RoA) and return on equity (RoE), Nomura said.
"The return on assets (RoA) and return on equity (RoE) are expected to be at 1.2 per cent and 11.8 per cent, respectively, by the financial year 2028 from 0.6 per cent and 0.54 per cent, respectively, in the financial year 2026," Nomura said.
That apart, the brokerage anticipates IDFC First Bank to drive a sector-leading earnings-per-share (EPS) compound annual growth rate (CAGR) of 67 per cent.
"Operating leverage has become visible at the segment level across retail liabilities, assets, and credit cards. However, it is not yet fully reflected in headline ratios due to strong growth in these businesses. The operating leverage was high over the financial years 2019 and 2025, while the IDFC First Bank invested in branches, people, technology, and multiple new businesses," according to Nomura.
Nomura expects NIM to bottom out in the financial year 2026 and recover gradually in the financial year 2027. The savings-account rate cuts represent an additional upside lever. A 50-100 basis-point reduction could potentially add 17-33 basis points and 12-23 basis points to margins and return on assets (RoAs).
IDFC First Bank confined the asset-quality stress in the microfinance institution portfolio, and the stress in credit card, consumer loans remained contained.