IDFC First Bank Q4: Targets Up to Rs 85 After Results

Stock reaction and key levels

IDFC First Bank shares moved higher after the lender reported its March-quarter results, with several brokerages expecting an uptrend from current levels. The stock, which touched a 52-week high of Rs 87 on February 1, 2026, was last noted at Rs 70.12 in the current session mentioned in the report. Ahead of the earnings, the stock had closed at Rs 67.23 on April 24. On April 27, the shares rose about 2.5% after the result, and at 10:10 am they were trading 2.4% higher at Rs 68.85.

Q4FY26 headline numbers: profit and income

For the quarter ended March 31, 2026, IDFC First Bank reported a marginal 5% rise in net profit to Rs 319 crore, compared with Rs 304 crore a year ago. Total income rose to Rs 12,183 crore in Q4, up from Rs 11,308 crore in the same quarter last year. The bank also reported interest income of Rs 8,219.21 crore in the January to March quarter versus Rs 6,424.35 crore in the year-ago period, a year-on-year increase of 28%.

One-offs that shaped the quarter

Brokerages and the bank flagged one-time items that affected reported profitability. Motilal Oswal attributed the “tepid” quarter to one-offs such as higher operating expenses related to the deposit fraud at the Chandigarh branch, treasury losses, and modest business growth. The management said it took an upfront impact of the fraud incident in Q4, including paid claims over Rs 646 crore of principal, with a post-tax impact stated at about Rs 480 crore to Rs 483 crore across the disclosures quoted. The bank also cited a treasury loss of about Rs 159 crore, and an income tax order that resulted in a tax refund of about Rs 173 crore.

Normalised profit and what management highlighted

Management commentary indicated that excluding the fraud impact, the treasury loss, and the tax item, the normalised profit after tax for Q4FY26 was about Rs 746 crore. Another note in the provided text said normalised PAT jumped 48.4% year-on-year to Rs 746 crore. The bank also said it has fully recognised the financial impact of the Chandigarh incident in Q4FY26 and does not expect further material adjustments. Alongside profitability, the bank flagged improving operating trends such as net interest income growth of 15.7% year-on-year in the quarter.

Asset quality improved and provisions eased

Asset quality strengthened sequentially in the March quarter. Gross NPA ratio improved to 1.61% at end-March from 1.69% in the December quarter, while net NPA improved to 0.48% from 0.53%. The bank’s CEO V Vaidyanathan said asset quality remained stable, with micro-finance being the key area of industry-wide stress in FY25 and FY26, and indicated that the micro-finance issue is “behind us” in the bank’s context. Provisioning also fell, with provisions reducing 18% quarter-on-quarter from Rs 1,398 crore to Rs 1,143 crore.

Margins, fees and credit costs: key operating signals

The bank reported NIM of 5.93% on an AUM basis for Q4, against its guidance of 5.85% for the quarter, while full-year NIM was 5.75% and management said it is expected to be stable into the next year. Fee and other income for the quarter grew 21.3% versus 15.5% in Q3, as per the management commentary cited. Provisions during Q4FY26 came down to 1.63% of loans, which the bank said is equivalent to 1.18% of assets, and described as the lowest level of two years. Separately, the bank shared a trend of provisions as a percentage of average total assets reducing from 1.92% in Q1FY26 to 1.18% in Q4FY26, and for full-year FY26 it stood at 1.52%.

Growth metrics: funded assets, loans and deposits

YES Securities said the lender ended the year with healthy balance sheet growth, with total gross funded assets up 3.9% quarter-on-quarter and 20% year-on-year. A separate data point cited loans and advances growth of 20% year-on-year as of March 31, 2026. On liabilities, management said customer deposits stood at about Rs 2,84,000 crore, with growth of about 17%, while the quarter-on-quarter growth was modest at about 1%. The management attributed the slower quarterly deposit growth to factors such as a reduction in savings account rates in certain buckets, the one-off fraud incident, and tight liquidity through the quarter.

Brokerage views: targets cluster at Rs 75, bulls at Rs 82 to Rs 85

Brokerage calls after the quarter ranged from neutral to buy, but targets generally moved into a narrow band for the near term. Motilal Oswal reiterated a Neutral rating with a target price of Rs 75, and said it slightly lowered FY27 and FY28 earnings estimates by 1% and 4%, respectively, while estimating RoA and RoE of 0.8% and 7.6% for FY27. YES Securities maintained an ‘add’ call with a target price of Rs 75, valuing the bank at 1.3x FY27 P/BV for an FY27 and FY28E RoE profile of 6.7% and 10.6%. Axis Direct has a buy call with a target of Rs 82, while Jefferies also has a Buy call with a target price of Rs 82 and noted that Q4 profit beat estimates due to lower credit costs and higher fees.

Nomura maintained a Buy call and raised its target to Rs 85 from Rs 80, citing a resilient quarter amid the fraud-related overhang and positive surprises in margins and asset quality. Jefferies also said loan growth is expected at around 20%, though mix shift and funding costs may limit margin, and it sees RoA at 1% by FY28E.

Key data points at a glance

Market impact and what investors tracked

The immediate market response focused on the profit beat versus estimates cited by Jefferies, the sequential improvement in GNPA and NNPA, and the decline in provisions and credit costs. The fraud-related item remained a central discussion point, but management emphasised that the impact was fully recognised in Q4 and that further material adjustments are not expected. The note that the first month of Q1FY27 started strong for deposits also became part of the post-result narrative, alongside expectations of healthy deposit growth in line with past trends.

Analysis: why the quarter matters

The quarter combined modest reported profit growth with a sharper contrast between reported and normalised profitability, due to one-off impacts including the Chandigarh fraud-related write-offs and treasury loss. From a valuation and expectations perspective, the brokerage target range of Rs 75 to Rs 85 reflects a focus on whether lower credit costs, stable NIM, and improving asset quality can translate into stronger, more consistent return ratios. At the same time, management commentary suggests the bank remains focused on strengthening the deposit franchise, while acknowledging that liquidity conditions and pricing decisions can affect short-term deposit momentum.

What to watch next

The bank’s meeting agenda referenced audited results, and investors will track follow-through in deposit traction, asset quality and provisioning trends into Q1FY27. The board has also approved borrowing through issuance of debt instruments up to Rs 5,000 crore, which is another item the market may monitor in the context of funding and growth plans. In the near term, brokerage commentary indicates attention will remain on operating costs, funding costs, and the extent to which credit cost improvements persist after Q4’s one-offs.