A leading private sector bank, renowned for its retail-focused lending and digital banking solutions, has released its Q3 performance metrics. Despite strong growth in deposits and loan book, with customer deposits surging 28.8% YoY, the bank faces scrutiny as its stock declined following margin compression and a slight uptick in non-performing assets.
Share Price Movement
The share price of IDFC First Bank Limited is down 7.7 percent to Rs. 57.45 per share on Monday, an increase from its previous close of Rs. 62.27 per share. The market capitalisation now stands at approximately Rs. 42,151 crore as of January 27, 2025.
Recent Updates
The bank completed its merger with IDFC Ltd in October 2024, adding Rs 618 crore to its net worth. Additionally, the outstanding share count was reduced by 16.64 crore, a decrease of approximately 11.5%.
Q3 Financial Highlights
IDFC First Bank reported a 53% drop in net profit to Rs 339 crore for Q3 FY2025, down from Rs 716 crore in the same quarter last year. Total income increased by 18.4% to Rs 11,123 crore, up from Rs 9,396 crore. Interest income rose by 18.6% to Rs 9,343 crore from Rs 7,879 crore. The gross NPA ratio improved by 4.9%, to 1.94% from 2.04% a year ago.
Provisions doubled by 104% to Rs 1,338 crore from Rs 655 crore. Gross slippages for Q3 FY2025 increased by 7.9%, reaching Rs 2,192 crore compared to Rs 2,031 crore in Q2 FY2025. The capital adequacy ratio declined by 6.5% to 15.65% for Q3 FY2025, compared to 16.73% at the end of Q3 FY2024.
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Management Commentary
“Majority of the increase in slippage during Q3FY 25 was from the microfinance business which constituted Rs 143 crore out of the said Rs 162 crore. Hence, gross slippage on the Retail, MSME, Agri and Corporate Loans, i.e the non-microfinance business was stable. These businesses constituted about 95 percent of the total book of the bank,”.
Competitors
IDFC First Bank competes with leading Indian banks like HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and SBI.
IDFC First Bank has a P/E of 23.66, which is more than the industry P/E of 10.25.
Market Outlook
The Indian banking industry is thriving, driven by strong economic growth, digital payment adoption, and financial inclusion efforts. Key developments include UPI expansion, rural credit digitalisation, and fintech innovations. With policy support like CBDC pilots and WhatsApp banking, the sector is modernising rapidly.
By 2025, the Indian fintech market is expected to reach $150 billion, solidifying India’s position as the third-largest global fintech ecosystem. These advancements ensure increased access to credit and financial services nationwide, supporting sustained economic growth.
Written By Fazal Ul Vahab C H
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