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Informist, Friday, Jul. 24, 2026

By Radhika Tiwari

MUMBAI – IDFC FIRST Bank is likely to post a sharp on-year rise in its net profit for the June quarter, driven by growth in loans and advances and stable asset quality, according to brokerages tracking the company.

The private-sector lender is expected to post a net profit of INR 6.92 billion for the June quarter, up 50% on year and 117% on quarter, according to the average of estimates from six brokerages. The highest estimate for the net profit is INR 8.79 billion from Bank of America Global Research and the lowest is INR 3.56 billion from YES Securities (India) Ltd.

IDFC FIRST Bank is likely to post a net interest income of INR 5.87 billion for the June quarter, up 19% on year and 4% on quarter, according to the estimates. The highest estimate for the company's net interest income is INR 6 billion from Bank of America and the lowest is INR 5.82 billion from Nomura Equity Research.

IDFC FIRST Bank's net interest income will grow in line with the average loan growth as the yield on advances is likely to rise in tandem with the rise in the cost of deposits. Consequently, the net interest margin will be stable sequentially, YES Securities said. The bank's net interest margin is expected to decline 10-20 basis points due to funding cost pressures, high base, and seasonality, Bank of America said.

The banking sector is likely to see better-than-expected business growth in the June quarter, but profitability will remain constrained due to funding cost pressures and weaker margins, Elara Securities (India) Pvt. Ltd. said. The sector is expected to report largely stable net interest margins in the June quarter, sequentially. The impact of earlier repo rate cuts and the reduction in marginal cost of funds-based lending rate has largely played out. The residual effect is now being neutralised by the churn in term deposits, YES Securities said.

The liquidity measures undertaken by the Reserve Bank of India have helped bring the wholesale deposit cost under control, the brokerage said. The weighted average domestic term deposit rate for private sector banks for the June and September quarters is expected to decline by 2 basis points to 6.69% from the March quarter, the brokerage said.

IDFC FIRST Bank's total advances were INR 3.05 trillion at the end of the June quarter, up 20.6% on year. Total deposits rose nearly 18% on year to INR 3.12 trillion from INR 2.65 trillion a year ago.

IDFC is likely to post a loan growth of 20-21% on year, brokerages said. The sequential loan growth will be moderate to reasonable, between 2.5% to 4% in the June quarter, YES Securities said.

The banking sector is likely to report a healthy loan growth for the June quarter, but pressure is likely to continue on liability-driven investments. While deposit growth is set to lag growth in advances, term deposits continue to lead incremental accretion mid muted traction in current and savings accounts, Elara Securities said. The foreign currency non-resident route should provide some relief and help in the mobilization of deposits till the September quarter, Motilal Oswal Financial Services Ltd. said.

IDFC FIRST Bank's credit cost is likely to stay within 2% in the June quarter, Motilal Oswal said. Credit cost is likely to remain benign across the banking sector, Elara Securities said.

"Management commentary on deposit mobilization, margin outlook, and the evolving asset quality environment will remain the key focus, particularly amid the uncertain geopolitical backdrop," Elara Securities (India) Pvt. Ltd. said. "Commentary around deposit repricing, funding cost, liability mix, and NIM trajectory in FY27 will be key discussion point across management interactions," the brokerage said.

At 1429 IST, IDFC Bank's shares were traded at INR 80.70 on the National Stock Exchange, up 1%. The shares have risen more than 13% since the bank announced its March quarter earnings on April 25.

Of the eight research reports on the bank available with Informist, six have a "buy" recommendation on the shares while two have a "hold" recommendation. The average target price for the "buy" recommendations is INR 79, which is 1% lower than the closing price Thursday. The target price for the "hold" recommendation is INR 80.

Following are the Apr-Jun earnings estimates for IDFC FIRST Bank from six brokerages in descending order of net profit, in INR billion:

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Edited by Pankaj Aher

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