Our 14th company in the Series of Best Stocks Below Rs. 50 is IDFC First Bank Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
IDFC Bank Limited is a banking company. The Bank’s segments include treasury, corporate & wholesale banking and retail banking.
Now Let’s check the important fundamental figures of this company. This is a mid cap company with Market Cap ₹29,677cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 61.42
Sector PE Ratio: 28.04
PE Ratio of this company is high but better than Sector’s PE. So it’s a Below Average PE than the peers of this company.
PB Ratio : 1.66
Sector PB Ratio : 2.37
PB Ratio of this company is low than Sector’s PB ratio. So it’s Good PB than the peers of this company.
Dividend Yield : 0.75%
Sector Dividend Yield : 0.54%
Dividend Yield of this company is high than Sector. Dividend of this company is Below Average than the peers of this company.
ROE: 2.53%
ROCE: 7.31%
ROE (Return on equity) and ROCE (Return on capital equity) is Below Average
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2021 | 18,221.95 | 483.17 |
| 2020 | 17,962.73 | -2,843.39 |
| 2019 | 13,028.32 | -1,907.88 |
| 2018 | 10,218.34 | 879.92 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2021 | 2020 | 2019 | 2018 |
| 1,45,260.58 | 1,33,830.05 | 1,49,003.72 | 1,11,295.71 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2021, Company have 1,45,260.58 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2021 | 2020 | 2019 | 2018 |
| 13,455.74 | 10,537.94 | 17,087.44 | -6,151.63 |
Asset Level: IDFC First Bank’s Assets to Equity ratio (8.5x) is low.
Allowance for Bad Loans: IDFC First Bank has a low allowance for bad loans (74%).
Low Risk Liabilities: 59% of IDFC First Bank’s liabilities are made up of primarily low risk sources of funding.
Loan Level: IDFC First Bank has an appropriate level of Loans to Assets ratio (59%).
Low Risk Deposits: IDFC First Bank’s Loans to Deposits ratio (113%) is appropriate.
Level of Bad Loans: IDFC First Bank has a high level of bad loans (4.4%).
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2021 | 36.51% | 14.77% | 4.14% | 6.23% | 38.36% |
| Mar 2021 | 36.52% | 14.76% | 3.99% | 6.19% | 38.53% |
| Dec 2020 | 36.56% | 15.09% | 3.55% | 8.37% | 36.43% |
| Sep 2020 | 36.60% | 10.33% | 2.39% | 16.88% | 33.80% |
Above table showing there is no big change in Promotors holding which is 36.51% in June 2021. FIIs invested in June 2021 with 14.77% and retail investor is 38.36%.
Investment Checklist for IDFC First Bank Ltd.
- The company is currently profitable
- Earnings have declined by 25% per year over past 5 years
- Shareholders have been diluted in the past year
- They do not pay a dividend
- Share price has been stable over the past 3 months
- At least 3 years of financial data is available
- Revenue is meaningful (₹80B)
- Market cap is meaningful (₹304B)
According to its historical performance we can predict stock target.
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Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 40 to 45
Target: 60 ( 40% Upside)
Time Horizon: 1 Year
Risk Profile: High Risk (Stock is 3.71x as volatile as Nifty)
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Hope you liked Our 14th company in the Series of Best Stocks Below Rs. 50. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
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