IDFC First Bank shares soar 9% after Q1 profit jumps 132% to Rs 1,075 crore. What are analysts saying?

Shares of IDFC First Bank rallied as much as 9% to Rs 88 on the BSE on Monday after the lender reported its highest-ever quarterly profit after tax (PAT) of Rs 1,075 crore for the quarter ended June 30, 2026. The profit jumped 132.4% year-on-year (YoY) from Rs 463 crore in the corresponding quarter last year.

The bank, however, disclosed that it received claims worth Rs 514.8 crore under the CGFMU scheme against its MFI portfolio during the quarter.

Net interest income (NII) rose 21.1% YoY to Rs 5,972.3 crore from Rs 4,933 crore a year earlier. The bank’s net interest margin (NIM) also improved to 5.96% in Q1 FY27 from 5.71% in Q1 FY26, marking an expansion of 25 basis points. On a sequential basis, NIM increased by 3 basis points.

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Asset quality showed further improvement. Gross non-performing assets (NPA) fell to 1.51% as of June 30, 2026, from 1.97% a year earlier, an improvement of 45 basis points. Gross NPA also declined by 10 basis points on a quarter-on-quarter basis.

IDFC Bank share price target

Emkay maintained its ADD rating with a target price of Rs 85 (5% upside) per share. It said PAT surged 132% YoY to Rs 1,080 crore, crossing the Rs 21,000 crore mark for the first time, driven by higher NII, strong fee income and lower provisions. Emkay expects positive operating jaws and lower provisioning to support an improvement in ROA over the next few years.

Motilal Oswal maintained its Neutral rating with a target price of Rs 90 per share, implying an 11% upside. The brokerage said IDFC First Bank delivered a strong quarter, supported by healthy operating performance and improved asset quality, aided by one-off interest on an IT refund and strong treasury gains.

Adjusted NIM declined 3 bps QoQ to 5.9%, with management expecting further contraction during the year and guiding for an NIM of 5.8%. Deposit growth remained healthy, driven by strong traction in CASA deposits and higher certificates of deposits, while loan growth was strong, supported by steady momentum in retail and a pick-up in wholesale segments.

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Management commentary

The lender said it remains focused on building a high-quality banking institution with strong governance standards and is seeing healthy business momentum.

Management said asset quality continued to strengthen, with gross NPA at 1.51% and net NPA at 0.44%. Provisions as a percentage of loans also continued to decline. During the quarter, the bank received a CGFMU claim of Rs 515 crore and, as a prudent measure, created a provision of Rs 515 crore to account for any potential impact from monsoon conditions or fuel price volatility during the rest of the year.

Managing Director and CEO V Vaidyanathan said that investments made in building the bank are now beginning to translate into operating leverage, supporting the rise in PAT to Rs 1,075 crore in Q1 FY27. Return on assets (ROA) also crossed 1%.

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