IDFC First Bank Shares Fall After It Lowers Five-Year Loan Book Guidance

Shares of IDFC First Bank Ltd. fell on Tuesday after it lowered its five-year loan book guidance while announcing its third-quarter results.

The bank's net profit rose 18% year-on-year to Rs 715.7 crore in the quarter ended December, according to an exchange filing.

The cost-to-income ratio of the private bank continued to be high, and the loan growth was set at 20%, as per the results declared on Saturday.

• Net interest income up 30% at Rs 4,286.6 crore (YoY) (Bloomberg estimate: Rs 791.4 crore).

• Other income up 32% to Rs 1,516.5 crore (YoY).

• Net profit up 18% to Rs 715.7 crore (YoY).

• Gross non-performing assets down 7 basis points to 2.04% (QoQ).

• Net NPA at 0.68% vs 0.68% (QoQ).

IDFC reduced the five-year loan book guidance to 20% from the current 25%. "We have put reasonably achievable numbers in our opinion because we have assumed the loan book will go by 20%, which, going into this country, is not difficult—we are already going on 25. We have to slow down to 20, if at all we come there or as we go there," V Vaidyanathan, managing director and chief executive officer of IDFC First Bank, told NDTV Profit.

Shares of the lender fell as much as 5.59% intraday, the lowest level since Jan. 10. It pared some loss to trade 5.19% lower at 10:58 a.m., compared to a 0.09% decline in the NSE Nifty 50.

The stock has risen 40.22% in the last 12 months. Total traded volume so far in the day stood at 3.6 times its 30-day average. The relative strength index was at 40.

Of the 19 analysts tracking the company, 11 maintain a 'buy' rating, five recommend a 'hold', and three suggest a 'sell', according to Bloomberg data. The average 12-month analysts consensus price target implies an upside of 40.1%.