IDFC First Bank Q4 FY25 Results: Net Profit Falls 58%, Dividend Proposed
IDFC First Bank announced its Q4 FY25 results on April 26, 2025, revealing a significant 58% year-on-year (YoY) decline in net profit to ₹304 crore, compared to ₹724 crore in Q4 FY24. Despite robust growth in loans and deposits, elevated provisions and asset quality challenges impacted profitability. The bank also proposed a dividend of ₹0.25 per share, pending approval at the Annual General Meeting. This article provides a detailed analysis of the results, including a stock price chart and key financial metrics.
Key Financial Highlights
- Net Profit: Dropped 58% YoY to ₹304 crore from ₹724 crore, below analyst estimates of ₹359.6 crore.
- Net Interest Income (NII): Grew 9.8% YoY to ₹4,907 crore from ₹4,469 crore, but fell short of expectations of ₹5,080 crore.
- Provisions: Increased to ₹1,450 crore from ₹722 crore YoY, reflecting higher credit costs, particularly in the microfinance segment.
- Asset Quality: Gross NPA improved slightly to 1.87% from 1.94% QoQ, while Net NPA rose marginally to 0.53% from 0.52% QoQ.
- Loan and Deposit Growth: Loans and advances rose 20.3% YoY to ₹241,848 crore, and customer deposits grew 25.2% YoY to ₹242,546 crore.
- CASA Ratio: Stood at 46.9%, slightly down from 47.2% in Q4 FY24.
- Dividend: Board proposed a ₹0.25 per share dividend, subject to shareholder approval.
Stock Price Performance
The stock price of IDFC First Bank has faced volatility, declining 25.44% over the past year, underperforming the Nifty Bank index, which gained 6.99%. On April 26, 2025, the stock closed at approximately ₹61.60, reflecting a 2.81% increase from the previous day’s close.
IDFC First Bank Stock Price Chart (1-Year)
Note: The chart above is a placeholder. For the latest stock price trends, check NSE/BSE or financial platforms tradingview.
Detailed Financial Analysis
The sharp decline in net profit was primarily driven by increased provisions, particularly in the microfinance segment, which has been a persistent challenge. The bank reported provisions and contingencies of ₹1,450 crore in Q4 FY25, up from ₹1,338 crore in Q3 FY25 and ₹722 crore in Q4 FY24. This reflects efforts to address asset quality issues, especially in microfinance, where the bank has reduced its exposure to 4.8% from 5.6% in Q2 FY25.
Despite the profit decline, IDFC First Bank showed strong growth in its core operations. Total business (loans and advances plus customer deposits) grew 22.7% YoY to ₹484,394 crore. Loans and advances increased by 20.3% YoY and 4.7% QoQ, while customer deposits rose 25.2% YoY and 6.7% QoQ. The CASA ratio, though slightly lower at 46.9%, remains robust, indicating a stable deposit mix.
The bank’s Net Interest Margin (NIM) faced pressure, declining to 6.04% in Q3 FY25 from 6.18% in Q2 FY25, partly due to the microfinance portfolio and a higher proportion of wholesale banking business. Analysts expect NIM to stabilize as the bank continues to optimize its portfolio.
Comparison with Analyst Expectations
| Metric | Actual (Q4 FY25) | CNBC-TV18 Poll | YoY Change |
|---|---|---|---|
| Net Profit | ₹304.1 crore | ₹359.6 crore | -58% |
| Net Interest Income | ₹4,907.1 crore | ₹5,080.2 crore | +9.8% |
| Gross NPA | 1.87% | 2% (Motilal Oswal) | -0.07% (QoQ) |
| Net NPA | 0.53% | 0.6% (Motilal Oswal) | +0.01% (QoQ) |
Investor Sentiment and Market Outlook
Posts on X reflect mixed sentiment. Some users highlighted the weak Q4 results, with net profit and NII falling below estimates, while others noted the bank’s strong loan and deposit growth as a positive sign for long-term stability. Analysts remain cautious, with Morgan Stanley maintaining an “Equal-weight” rating and a target price of ₹58, citing limited near-term upside due to credit costs. However, the proposed dividend and robust business growth could attract income-focused investors.
Technical analysts suggest a “buy-on-dip” strategy, with support levels around ₹60–61.50 and potential targets at ₹64–68 if the stock breaks above key resistance levels. Investors should monitor management commentary on microfinance portfolio management and NIM stability in upcoming earnings calls.
Conclusion
IDFC First Bank’s Q4 FY25 results reflect a challenging quarter marked by a significant profit decline due to higher provisions and microfinance-related issues. However, strong growth in loans, deposits, and a proposed dividend signal resilience in its core operations. Investors should weigh the bank’s long-term growth potential against near-term asset quality concerns.