IDFC First Bank shares jump 10% as Q1 earnings impress and brokers hike target prices

On Monday the market saw IDFC First Bank’s shares surge nearly 10%, closing around Rs 88.70 after the bank delivered a surprisingly strong first‑quarter performance. The results not only beat expectations – profit after tax jumped 61% – but also came with a refreshed FY27 outlook that resonated with investors.

Management lifted its net‑interest‑margin guidance by five basis points to about 5.80% and trimmed the credit‑cost forecast to 1.5‑1.6% from the earlier 1.7‑1.8% band. That combination of higher earnings potential and lower risk helped revive confidence, especially after a brief deposit‑growth slowdown linked to a fraud episode in Haryana during Q4.

Analysts at Nuvama highlighted the one‑off interest earned from an IT refund and solid treasury gains as key boosters to the bottom line. They also noted that deposit growth rebounded impressively – 17.7% year‑on‑year and 5.9% quarter‑on‑quarter – driven largely by a resurgence in CASA balances.

In the wake of the upbeat numbers, a slew of brokerages upgraded their ratings. CLSA moved the stock to “Accumulate” from “Hold” and raised its target to Rs 95 (up from Rs 73). ICICI Securities turned a “Add” into a “Buy”, bumping its price objective to Rs 100. Axis Capital also switched from “Reduce” to “Add”, taking its target to Rs 85.

Other heavyweight houses weighed in as well. HSBC sees the shares worth Rs 100, Jefferies at Rs 96, JPMorgan at Rs 90, while Nomura and DAM Capital each peg the stock at Rs 95. Among the broader set of 16 broker updates released so far, Investec is the most optimistic with a Rs 115 target, whereas Morgan Stanley is the most cautious, forecasting Rs 75.

Nuvama, after factoring in the Q1 beat and ongoing improvements in operating expenses and credit costs, lifted its earnings outlook and now expects a return on assets (RoA) of about 1% for FY27 – a notable rise from the 0.4% projected for FY26. Accordingly, the firm upgraded its rating to “Buy” with a revised target of Rs 95, based on a 1.4× June‑28 earnings multiple.

SBI Securities echoed the positive sentiment, calling the quarter “healthy” thanks to solid asset growth, margin expansion and stable asset quality, and kept an open call on the stock with a Rs 93 target.

All these upgrades, together with the bank’s reaffirmed guidance, helped push the share price up almost 10% in a single session, signaling that market participants are now betting on a steadier, more profitable trajectory for IDFC First Bank.