IDFC First Bank Q2 FY27 Results (NSE: IDFCFIRSTB)
Signal: Earnings grew
The read
The operating trajectory improved: total income rose 20.2% YoY to ₹14,21,778 lakh, pre-provision operating profit rose 35.0% to ₹2,53,853 lakh and GNPA improved to 1.32% from 1.86%, but PAT growth to ₹1,04,460 lakh was still heavily provision-led as provisions fell 21.7% and ROA at 0.93% remained below the 1% objective.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹14,217.78 Cr | +20.2% | +6.4% |
| EBIT | ₹2,538.53 Cr | +35.0% | |
| Net profit | ₹1,044.6 Cr | +196.5% | |
| EPS | ₹1.21 | +236.1% | |
| EBIT margin | 17.9% |
P&L walk
Standalone total income grew 20.2% YoY to ₹14,21,778 lakh and operating profit grew 35.0% to ₹2,53,853 lakh; PAT growth to ₹1,04,460 lakh was amplified by provisions falling 21.7% YoY to ₹1,13,695 lakh, while operating profit declined 0.6% QoQ.
Segments
Retail Banking drove the result with segment profit after provisions rising to ₹1,01,327 lakh from ₹5,229 lakh YoY, including Other Retail Banking at ₹90,124 lakh versus ₹13,708 lakh and Digital Banking turning profitable at ₹11,203 lakh versus a ₹8,479 lakh loss; Treasury profit fell to ₹3,593 lakh from ₹2,652 lakh loss and Wholesale Banking profit rose 9.2% to ₹46,063 lakh.
Key positives
- Retail Banking profit after provisions rose to ₹1,01,327 lakh from ₹5,229 lakh YoY, while Digital Banking turned profitable at ₹11,203 lakh from a ₹8,479 lakh loss.
- Total income grew 20.2% YoY to ₹14,21,778 lakh and pre-provision operating profit grew 35.0% to ₹2,53,853 lakh, with operating expenses growing 16.0%.
- Asset quality improved as GNPA declined to 1.32% from 1.86% and NNPA declined to 0.40% from 0.52%.
- Advances grew 30.5% YoY to ₹3,35,64,210 lakh and deposits grew 25.9% to ₹3,48,58,343 lakh.
Key concerns
- PAT of ₹1,04,460 lakh was supported by provisions falling 21.7% YoY to ₹1,13,695 lakh, making the earnings step-up more credit-cost-sensitive than the 35.0% operating-profit growth.
- ROA was 0.93%, down sequentially from 1.05% and still below the 1% objective referenced in prior management context.
- H1 operating cash flow was negative ₹5,35,772 lakh versus positive ₹1,15,133 lakh in the prior-year half, despite H1 PAT of ₹2,11,956 lakh.
- Operating profit declined 0.6% QoQ to ₹2,53,853 lakh while operating expenses rose 3.7% QoQ.
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