IDFC First Bank Share Price Jumps Over 5%, Extends Rally to Third Day in a Row

Shares of IDFC First Bank surged over 5% on Tuesday, continuing a strong upward momentum for the third consecutive trading session, buoyed by robust buying interest, improved outlook on private banks, and positive institutional flows. The stock touched an intraday high of ₹95.80 on the NSE, up from its previous close of ₹91.10, before settling at ₹95.40, marking a 4.72% gain for the day.

Market Performance and Trading Volumes

IDFC First Bank's stock has gained over 12% in the past three trading days, outperforming the Nifty Bank index, which rose around 2.1% in the same period. On Tuesday, trading volumes surged nearly 2.5 times the 30-day average, reflecting heightened interest from both retail and institutional participants.

Market experts point to a combination of positive technical setup, recent improvements in asset quality, and growth in loan disbursement as key factors driving investor enthusiasm.

“The rally in IDFC First Bank reflects growing confidence in its transformation journey from a legacy infrastructure lender to a diversified retail bank,” said Ravi Menon, Senior Banking Analyst at Karvy Broking. “Its strong retail loan growth and reduced provisioning have started to show in profitability metrics.”

Tailwinds Supporting the Rally

The stock's rally is underpinned by several key developments and broader sectoral optimism:

1. Strong Q4FY25 Performance
   IDFC First Bank reported a net profit of ₹920 crore for the quarter ended March 2025, a 27% year-on-year increase. This was led by an expansion in net interest margins (NIMs) and higher fee income.

2. Asset Quality Improvement
   The bank's gross non-performing assets (GNPA) declined to 2.01%, while net NPA fell to 0.68%, a significant improvement from last year’s levels. The provision coverage ratio stood at a healthy 78%, reflecting a prudent risk management strategy.

3. Retail-Focused Strategy
   Retail loans now account for over 75% of the total loan book, helping the bank reduce its exposure to lumpy corporate lending. Analysts believe this focus will ensure stable and recurring earnings.

4. Favorable Brokerage Ratings
   Brokerages such as Motilal Oswal and Jefferies have recently upgraded the stock to "Buy" with target prices in the range of ₹105–₹110, citing strong credit growth and margin resilience.

Technical Indicators Turn Bullish

Technical charts indicate a bullish breakout above key resistance levels. The stock has broken past its 100-day and 200-day moving averages, signaling continued strength.

“Momentum indicators like the Relative Strength Index (RSI) and MACD are showing bullish divergence. If the stock sustains above ₹96, we could see further upside toward ₹100+ in the near term,” said Priya Mehta, Technical Analyst at Axis Securities.

The recent rally is supported by institutional buying, especially from mutual funds and FIIs, who see the bank as a long-term value play in the private sector banking space.

Sector-Wide Optimism in Private Banks

Private sector banks have been on investors’ radar amid expectations of continued rate stability, credit growth, and stable inflation outlook. The Reserve Bank of India (RBI) maintained its repo rate at 6.50% in its last monetary policy, boosting sentiment across interest-sensitive sectors.

“As inflation moderates and economic activity picks up, we expect private banks with strong retail franchises like IDFC First to outperform,” said Anand Kulkarni, Head of Research at TrustLine Capital.

Investor Outlook: Is More Upside in Store?

IDFC First Bank has delivered more than 30% return in the past six months, but analysts believe the re-rating is still underway. The stock trades at a price-to-book (P/B) ratio of 1.5x, which is considered attractive compared to peers like Axis Bank and ICICI Bank.

“There’s scope for further valuation rerating, especially if the bank can sustain its 15–18% RoE guidance by FY26,” said Menon.

Long-term investors are advised to keep an eye on the bank’s progress on cost-to-income ratio, CASA (current and savings account) growth, and capital adequacy metrics in the upcoming quarters.

With improving fundamentals, sectoral tailwinds, and a favorable technical setup, IDFC First Bank’s stock has caught the market’s attention. While some near-term profit booking cannot be ruled out, the medium-to-long term picture remains constructive. Investors looking for exposure to emerging private banks with a retail-driven model may find IDFC First Bank an attractive bet.