IDFC First Bank (IDFCFIRSTB) Q2 26/27 earnings summary

Executive summary

• Q2 PAT was INR 1,045 crore, with core PAT of INR 1,036 crore; standalone statutory net profit was INR 1,074.96 crore and consolidated net profit was INR 1,147.82 crore.

• Total loan assets reached INR 3,46,913 crore, up 30.1% YoY, and deposits reached INR 3,48,583 crore, up 25.9%; FCNR mobilization of INR 34,390 crore supported funding but temporarily diluted reported NIM.

• Gross NPA improved to 1.32% and net NPA to 0.40%; Q2 operating cash flow was not reported here, but H1 cash flow was an outflow of INR 5,357.72 crore.

Financial highlights

• NII was INR 6,184 crore, up 21% YoY and 3.5% QoQ; excluding Q1 interest on the income-tax refund, sequential growth was 4.5%. Fee and other income rose 24.5% YoY to INR 2,285 crore.

• Operating income excluding trading gains rose 21.9% YoY to INR 8,469 crore; core operating profit increased 38.5% to INR 2,527 crore. Treasury gains were INR 11 crore versus INR 181 crore in Q1.

• Operating expenses were INR 5,942 crore, up 16% YoY; cost-to-income excluding trading gains improved 358 bps YoY to 70.2%.

• Provisions were INR 1,137 crore, down 21.7% YoY; standalone provisions and contingencies were INR 1,143.88 crore. Credit cost improved to 1.38%.

• H1 FY27 PAT was INR 2,120 crore, up 160.1% YoY; H1 operating income excluding trading gains rose 21.7% to INR 16,570 crore.

Outlook and guidance

• NIM is expected to stay broadly range-bound in Q3 and recover to 5.8% by Q4; management also expects ~5.8% into FY28 under current assumptions.

• FY27 incremental cost-to-income ratio is expected at 55%; income growth exceeded expense growth by over 500 bps YoY for two consecutive quarters.

• Loan growth of at least 20% and deposit growth capacity of 20%-22% were described as visible, with deposits expected to grow slightly faster than loans.

• Credit cost guidance of 1.5%-1.6% was affirmed; management expects portfolio performance to remain reasonably good over the next couple of quarters, subject to evolving risks.

• Retail liabilities cost-to-income is expected to trend toward 100%, and credit card cost-to-income toward the mid-60s, over 4-5 years.